A New York City man has been charged with hacking, trafficking in stolen credit card data, and laundering money with bitcoin, highlighting the cryptocurrency’s enduring appeal to cyber criminals.
Vitalii Antonenko, 28, was arrested and detained on money laundering charges on arrival at New York’s JFK airport from Ukraine in March last year after undercover agents linked him to two bitcoin wallets used in transactions totaling $94 million, according to a Law360 report.
On Wednesday this week, the U.S. attorney’s office in Boston handed down the indictment that could see Antonenko jailed for 20 years and fined up to $500,000.
According to the indictment, Antonenko, along with a number of co-conspirators, scoured the internet for vulnerable computer networks that were likely to contain credit and debit card details.
The hackers then sold the stolen information on so-called darknet markets that are used to traffic all manner of illegal drugs, firearms, and data.
It’s thought bitcoin as well as bank and cash transactions was used to launder the proceeds, with over $140,000 from the pair of bitcoin wallets found to have been funneled to wallets controlled by Antonenko.
Last year, Antonenko’s lawyers took the rare step of requesting a psychiatric evaluation of their client after they said he had trouble communicating and suggested he is secretly working for the CIA.
The charges against Antonenko come as the bitcoin and cryptocurrency community struggles to overcome historic links with illegal and illicit transactions.
Bitcoin’s semi-anonymous nature, which has led it to be referred to as “internet cash,” makes it attractive for those wishing to avoid government scrutiny and law enforcement.
However, computer scientists have developed forensic and sophisticated techniques that often allow bitcoin and cryptocurrency users to be identified.
In January, criminal activity using bitcoin hit an all-time high, according to research from cryptocurrency and blockchain analysis firm Chainalysis.
Total darknet market sales grew 70% in 2019 to over $790 million worth of bitcoin and other cryptocurrencies, making it the first time sales have surpassed $600 million.
“Crypto crime will likely continue to evolve in both scope and technological sophistication, just like cryptocurrency itself,” Chainalysis researchers wrote in an in-depth report.
“As law enforcement, regulators, and cryptocurrency professionals improve their ability to prevent and respond to various forms of crypto crime, the criminals themselves will also grow more sophisticated—that’s the one constant we’ve seen as blockchain investigators.”