Similar to fiat currency, cryptocurrency has been linked to various illicit activities, including fraud, cyberattacks, and drug trafficking. In 2023, these activities accounted for at least $24.4 billion of crypto transaction volume, a small yet significant fraction that underscores the criminal exploitation often shadowing economic opportunities. The evolving nature of blockchain technology presents notable challenges and learning curves for law enforcement but also offers unique investigative opportunities.
Recent Cases in Crypto Crime:
- Brothers Charged for $25M Ethereum Exploit: Two brothers, Anton Peraire-Bueno (24) from Boston and James Pepaire-Bueno (28) from New York, face charges for exploiting MEV bots on the Ethereum blockchain, allegedly stealing $25 million worth of cryptocurrency in just 12 seconds. Anton Peraire-Bueno and James Pepaire-Bueno meticulously planned the Exploit over the course of several months. Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole. As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges. After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds. The charges include conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Both were arrested on May 14, 2024.
- North Korean Group Kimsuky Targets South Korean Crypto Firms: The state-backed North Korean hacking group Kimsuky has deployed a new malware variant named “Durian” to attack South Korean crypto firms. According to a May 9 report by cybersecurity firm Kaspersky, the malware exploits legitimate security software used exclusively by crypto firms in South Korea. It acts as an installer for continuous malware deployment, including a backdoor known as “AppleSeed” and other tools like LazyLoad. This suggests a possible connection between Kimsuky and the notorious Lazarus Group.
- Florida AG Files Charges in $8M Crypto Money Laundering Scheme: Florida Attorney General Ashley Moody announced on May 8th, 2024 criminal charges against Juan Paulo Galeano and Carlos Andrews Cardona Gomez for operating a cryptocurrency money laundering scheme linked to Colombia. According to the investigation, the defendants conducted hundreds of financial transactions through digital asset/cryptocurrency exchange platforms, along with federal wire transfers. The defendants used shell companies to purchase cryptocurrency. Galeano claimed to be the officer or director of Canvas Digital Corp, based out of Miramar and advertised as a consulting service that focuses on digital services, marketing and photography. Cardona claimed to be the officer or director of Cabusa Compania Sas Corp, operating directly from Medellin, Colombia. The defendants utilized multiple cryptocurrency exchanges, including Kraken, Binance and FTX Crypto. The investigation further revealed that the defendants claimed to provide digital services; however, there is no evidence of product or services. The defendants used a combination of the digital exchange platforms and multiple financial institutions—including JP Morgan Chase, Bank of America, Citibank and more—to layer the financial transactions and obscure the source of the funds. The money-service business scheme allowed approximately $8 million in U.S. currency to be withdrawn in Medellin, Colombia. Galeano was arrested by the Broward Sheriff’s Office, while Cardona remains a fugitive in Colombia. Attorney General Moody’s OSP will prosecute the case.
These cases underscore the ongoing complexities and challenges in combating crypto-related crimes, even as the technology continues to evolve and expand.