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DOJ Extradites Suspected Crypto Money Launderer

The United States government has extradited Denis Mihaqloviv Dubnikov from the Netherlands on suspicion of cryptocurrency money laundering.

DOJ Extradites Suspected Crypto Money Launderer
Shutterstock cover by Paul Brady Photography

Key Takeaways

  • The Department of Justice's Office of International Affairs has extradited a 29-year-old Russian man 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 found guilty.
  • The U.S. govermment has been stepping up its oversight of the crypto space in recent months in a bid to clamp down on criminal activity.

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The Department of Justice said that Dubnikov faces up to 20 years in prison if found guilty.  

Justice Department Extradites Alleged Launderer 

The United States government is taking big steps to clamp down on criminal activity in the cryptocurrency space. 

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

A 29-year-old Russian man named Denis Mihaqloviv Dubnikov was summoned to a federal court in Portland, Oregon 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, Ryuk actors, 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, source, location, ownership, and control of the ransom proceeds,” the release noted. It added that Dubnikov was allegedly responsible for laundering $400,000 in ransomware payments in 2019. 

Ryuk is a ransomware software 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 Justice Department estimates that it’s responsible for stealing more than $70 million since its launching. 

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

Dubnikov’s case comes as the U.S. government takes an aggressive approach to clamp down on criminal activity in the digital assets arena. 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 mixer 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 Office of International Affairs led Dubnikov’s extradition, and its newly-established Ransomware and Digital Extortion Task Force is also working on the case, along with the FBI. 

Dunikov’s five-day trial is slated to commence on October 4. 

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

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