The central theses
- The Justice Department’s international affairs office has extradited a 29-year-old Russian man from the Netherlands on suspicion of laundering stolen digital assets linked to the Ryuk ransomware bug.
- Denis Mihaqloviv Dubnikov faces up to 20 years in prison if found guilty.
- The US government has increased its oversight of the crypto space in recent months to curb criminal activity.
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The Justice Ministry said Dubnikov could face up to 20 years in prison if found guilty.
Justice Department extradites suspected money launderer
The United States government is taking major steps to stem cryptocurrency criminal activity.
The Justice Department issued another crypto-related update on Wednesday, confirming that it had extradited an alleged cryptocurrency scrubber from the Netherlands.
A 29-year-old Russian man named Denis Mihaqloviv Dubnikov was summoned to appear in federal court in Portland, Oregon on Wednesday on charges of laundering ransom payments related to the Ryuk ransomware attacks. According to the press release, he faces up to 20 years in prison if convicted.
“After receiving ransom payments, Ryuk actors, Dubnikov and his co-conspirators, and others involved in the scheme were allegedly involved in various financial transactions, including international financial transactions, in order to disguise the nature, source, location, ownership, and control of the ransom proceeds,” reads in the press release. It 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 Justice Department estimates that it has been responsible for the theft of more than $70 million since its inception.
Ryuk was initially suspected of being the product of North Korea’s 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 across blockchains like Ethereum.
Dubnikov’s case comes as the US government is taking an aggressive approach to cracking down on criminal activity involving digital assets. The Treasury Department’s Office of Foreign Assets Control sanctioned Tornado Cash last week, citing its popularity with North Korea’s Lazarus Group and other criminals. The Ethereum mixer joins a blacklist that also includes Blender, although 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 International Affairs Office led the extradition of Dubnikov, and its newly established Ransomware and Digital Extortion Task Force is also working with the FBI on the case.
Dunikov’s five-day trial is scheduled to begin on October 4.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.
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