Cryptonator, an online cryptocurrency exchange and digital wallet, was seized in a joint operation by the FBI, the US Internal Revenue Service (IRS), and German police for facilitating crimes, including—but not limited to—computer hacking, ransomware, fraud, and identity theft.
In his testimony, IRS special agent Justin Allen states that Bitcoin wallet addresses controlled by the exchange were used to send and receive as much as $71 million back and forth between entities sanctioned by US authorities. Another $54 million passing through the exchange involved hacked or stolen funds, $25 million came from transactions with dark web marketplaces or fraud companies, and over $8 million has been linked to ransomware campaigns.
Cryptonator as a service could still be used by innocent users as an online crypto wallet and exchange. However, the exchange seems to have turned a blind eye to its services being used for nefarious purposes, with court documents stating that it took a 0.9 per cent cut per merchant transaction, making significant money. A criminal indictment filed by the feds claimed the operation “involved an international money laundering scheme that, under its business model, catered to criminals.”
The site was set up by Roman Boss, a Russian citizen living in Germany, in December 2023. Boss is now being charged with two major offences — operating an unlicensed money-transmitting business and conspiracy to commit money laundering. Both the DoJ and IRS are trying to get him arrested and any illegal funds seized.
Two FBI agents operating undercover were able to get away with malicious transactions on the site as well. The first happened in July 2021, when an FBI operative in Florida made an account on Cryptonator and spent $4,195 in digicash at a known dark web site that claimed to trade stolen identification records. Boss allegedly helped facilitate the transaction via the service, ensuring the agent that the transaction would be anonymous and that the currency would be mixed at his end to hide the source.
Another FBI agent operating undercover as a ransomware group affiliate used the site to offer criminals fake, stolen data in exchange for a portion of the earnings. They received $14,500 worth of Bitcoin in two transactions through the exchange.
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