TRM Labs research report: 70% of cryptocurrency theft proceeds come from Russian-speaking hacker groups

According to new research from TRM Labs, Russia’s involvement in the illegal cryptocurrency business has increased significantly in 2023, reaching unprecedented levels of influence and profitability.

Russian Hackers’ Dominance in Cryptocurrency Crime

TRM Labs research reveals a grim phenomenon: nearly 70% of cryptocurrency proceeds from ransomware can be traced back to Russian-speaking hacker groups, a proportion that highlights their prominent position in the cybercrime world.

The report further laid bare Russia’s central role in global hacking entities that have illegally stolen up to $500 million in cryptocurrency. Of particular concern are two ransomware operators, ALPHV/BlackCat and Lockbit, whose illicit proceeds exceeded $320 million.

Lockbit, an internationally sanctioned hacking group, has targeted a number of high-profile companies including Boeing and the Royal Mail. BlackCat/ALPHV targeted MGM Resorts and Fortune 500 company Henry Schein, a giant in the dental and medical supplies wholesale industry. These attack cases not only demonstrate the widespread influence and superb skills of these hacker groups, but also reveal the huge financial losses suffered by victims as a result of these attacks.

Garantex acts as hub for illegal cryptocurrency trading

New research from TRM Labs reveals that Russia’s Garantex exchange plays a central role in sanctioned cryptocurrency trading. One Russian exchange, Garantex, handles more than 80% of all sanctioned cryptocurrency trades, according to research, underscoring its dominance in illicit trading.

The total market capitalization of cryptocurrencies is currently $2.34 trillion | Chart: TradingView

Garantex, the Moscow-based trading company, has become an important hub for global trading of Bitcoin with approved entities. It is not only a trading venue with local legal authorization, but also a hub connecting illegal financial flows, allowing a large number of sanctioned cryptocurrency transactions to be carried out.

However, despite Garantex's actions having come to the attention of regulators and resulting penalties, it continues to operate. This fact exposes the shortcomings of the existing regulatory system and demonstrates the significant challenges law enforcement agencies face in combating illegal cryptocurrency activities. The continued operation of Garantex not only poses a challenge to regulators, but also poses a threat to the security and integrity of the entire financial system.

Given Garantex’s monopoly on regulated cryptocurrency trading, there is a clear need for stricter monitoring and regulatory measures. Regulators must step up scrutiny of such exchanges to ensure that their trading activities comply with laws and regulations and prevent illegal funds from flowing through cryptocurrency channels. Only in this way can the spread of illegal cryptocurrency transactions be effectively curbed and the stability and security of the global financial system protected.

Cryptocurrency may become a new means of evading sanctions

As the conflict between Russia and Ukraine continues, more individuals and groups are seeking to use cryptocurrencies to circumvent the resulting economic sanctions.

This trend reveals how criminals and hackers are quickly leveraging emerging cryptocurrency technology to bypass traditional financial regulations and sanctions and conduct illegal cross-border trade and fund transfers. At the same time, the anonymity and cross-border nature of cryptocurrency make it an ideal tool for criminal activities.

TRM Labs research noted that in response to this evasion, U.S. officials have identified and blocked multiple Bitcoin and Ethereum addresses associated with sanctions evasion tactics.

In addition, the widespread use of cryptocurrencies in illegal activities highlights the urgency of strengthening global regulatory efforts. Effective measures must be taken to combat and supervise these so-called “dirty” cryptocurrency activities to prevent the flow of illicit funds and potential criminal conduct.

It is worth noting that although Russia occupies a place in cryptocurrency crime, analysts also point out that North Korea cannot be ignored in this area. In 2023, attacks by North Korean hackers resulted in the theft of up to $1 billion worth of Bitcoin. This figure not only highlights North Korea's position in global cybersecurity threats, but also emphasizes the need for the international community to strengthen cooperation and supervision in cryptocurrency supervision. Responses.

Conclusion:

TRM Labs’ report highlights the increasing popularity of cryptocurrencies in illicit financial activities, particularly the active role of Russian hackers and exchanges. This phenomenon has posed new challenges to the global financial regulatory system, requiring regulatory agencies to strengthen cross-border cooperation and adopt innovative means to combat illegal transactions and evasion of sanctions using cryptocurrency.

In order to maintain the integrity and security of the financial system, regulatory policies and simultaneous upgrades of technology must be strengthened on a global scale. This requires not only the cooperation of law and technology, but also the joint efforts of the international community to build a more secure and transparent cryptocurrency trading environment. Through these measures, we can more effectively address the risks posed by cryptocurrencies, protect legitimate economic activities, and promote global financial stability.

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