Feds Seize $34 Million In Cryptocurrency From ‘Chain Hopping’ Dark Web Hustler

Last updated: Mar 30, 2023
3 Min Read
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The US Department of Justice (DOJ) has seized $34 million worth of cryptocurrency tied to illegal Dark Web activity.

According to the DOJ, an unidentified Florida man was arrested after raking in millions of dollars using an online alias to make over 100,000 sales of illegal items on the Dark Web, including data stolen from hacking victims to be used for online accounts such as HBO, Uber, and Netflix.

The suspect had allegedly been sending his proceeds to crypto tumblers (mixers) to try and obfuscate the coins, the DOJ said.

“As detailed in the complaint, records analysis revealed that the South Florida resident utilized so-called 'tumblers' and illegal Dark Web money transmitter services to launder one cryptocurrency for another—a technique called 'chain hopping'—in violation of federal money laundering statutes.”

The DOJ’s operation, dubbed “Operation TORnado,” was a joint operation between the Organized Crime Drug Enforcement Task Force (OCDETF) and federal, state and local law enforcement agencies.

Image via Shutterstock 

On the other side of the Atlantic the very next day, German authorities announced they had shut down local servers for the world’s largest Dark Web marketplace, Hydra. German officials also announced they had seized 543 Bitcoin, worth about $23 million Euros at the time of writing.


“Among other things, there is a suspicion of the commercial operation of criminal trading platforms on the Internet, the commercial procurement or granting of an opportunity for the unauthorized purchase or the unauthorized sale of narcotics as well as commercial money laundering,” German authorities said of the marketplace.


Officials said that Hydra was using its own mixing service called Bitcoin Bank Mixer, which made investigations “extremely difficult for law enforcement agencies.”


Also on Tuesday, the U.S. Treasury’s Office of Foreign Assets announced new sanctions on Hydra, as well as Garantex, which officials describe as a “ransomware-enabling virtual currency exchange.”


“The global threat of cybercrime and ransomware that originates in Russia, and the ability of criminal leaders to operate there with impunity, is deeply concerning to the United States,” said Secretary of the Treasury Janet L. Yellen. “Our actions send a message today to criminals that you cannot hide on the darknet or their forums, and you cannot hide in Russia or anywhere else in the world. In coordination with allies and partners like Germany and Estonia, we will continue to disrupt these networks.”



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