DOJ Extradites Suspected Crypto Money Launderer

Key points to remember

  • The Justice Ministry’s International Affairs Office has extradited a 29-year-old Russian from the Netherlands on suspicion of laundering stolen digital assets in connection with the Ryuk ransomware bug.
  • Denis Mihaqloviv Dubnikov faces up to 20 years in prison if convicted.
  • The US government has increased its surveillance of the crypto space in recent months in an effort to crack down on criminal activity.

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The Justice Department said Dubnikov faces up to 20 years in prison if convicted.

Justice Department extradites alleged money launderer

The United States government is taking great measures to suppress criminal activity in the cryptocurrency space.

The Justice Department released another crypto-related update on Wednesday confirming that it had extradited an alleged cryptocurrency launderer from the Netherlands.

A 29-year-old Russian man named Denis Mihaqloviv Dubnikov was summoned to federal court in Portland, Oregon on Wednesday on allegations of laundering ransom payments in connection with the Ryuk ransomware attacks. According to the press release, he could be jailed for up to 20 years if convicted.

After receiving ransom payments, the actors of Ryuk, Dubnikov and his co-conspirators, and others involved in the scheme, allegedly engaged in various financial transactions, including international financial transactions, to conceal the nature, the source, location, ownership and control of the ransom product,” the statement noted. He added that Dubnikov was allegedly responsible for laundering $400,000 in ransomware payments in 2019.

Ryuk is a ransomware bug that emerged in 2018 and has since targeted thousands of victims worldwide. Ryuk typically encrypts data on infected devices and orders targets to pay a ransom, often in Bitcoin, to decrypt the data. The Department of Justice estimates that it is responsible for the theft of more than $70 million since its launch.

Ryuk was initially suspected to be the product of North Korean state-sponsored cybercriminals, but has more recently been traced to Russian crime syndicates. It predated Conti, another Russian ransomware bug that saw its creators launder billions of dollars of stolen crypto through blockchains like Ethereum.

The Dubnikov case comes as the US government takes an aggressive approach to cracking down on criminal activity in the area of ​​digital assets. The Treasury Department’s Office of Foreign Assets Control sanctioned Tornado Cash last week, citing its popularity among North Korea’s Lazarus Group and other criminals. The Ethereum blender joins a blacklist that also includes Blender, though its ban was notable in that OFAC sanctioned the smart contract code itself rather than just a list of associated addresses.

The Justice Department’s Bureau of International Affairs led Dubnikov’s extradition, and its new Ransomware and Digital Extortion Task Force is also working on the case, along with the FBI.

Dunikov’s five-day trial is scheduled to begin Oct. 4.

Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.

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