Denis Dubnikov, the founder of Coyote Crypto and Eggchange over-the-counter service (OTC), has been convicted on charges of assisting a ransomware gang in laundering digital currencies.
Court documents reveal that Dubnikov received no prison time for his role in the crime but was asked to forfeit $2,000 after pleading guilty to the charges. The sentence has been described as a “slap on the wrist,” but legal experts note that Dubnikov has been cooperative with investigators since his arrest.
Dubnikov assisted the Ryuk ransomware gang in laundering over $400,000 worth of illicit funds from victims, according to the U.S. Department of Justice. Dubnikov used his OTC services based in Europe to launder the funds for the group, effectively making him an accessory to the crime.
A court indictment alleged that Dubnikov helped the Ryuk gang by splitting ransoms into smaller amounts, sending them to multiple wallets, and finally exchanging the funds for BTC and fiat currencies such as the Chinese yuan. Dubnikov was arrested in the Netherlands in 2021, and after a lengthy extradition battle, the Russian national was shipped to the U.S. to stand trial in 2022.
“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,” a DoJ document read.
The weight of the charges levied against Dubnikov suggested he was staring at the possibility of up to 20 years in prison and the payment of a $500,000 fine. Given his guilty plea and cooperation, Dubnikov was sentenced to imprisonment for time served, with the court authorizing his release on parole.
With his conviction on the offense of conspiracy to commit the laundering of monetary instruments, Dubnikov was asked to forfeit $2,000 and asked to pay $100 for a special assessment.
Policing the digital currency industry
The DoJ has stepped up its efforts in policing the digital currency ecosystem in the wake of debilitating losses triggered by the activities of bad actors in the industry. Since 2022, the department has been scoring convictions against digital asset scammers, confiscating digital currencies worth millions of dollars.
The latest of such high-profile busts came in early April when the DoJ announced the seizure of over $112 million in wallets linked to digital asset investment scams. Most of the funds were related to romance and pig butchering scams, with the DoJ stating that it will “seek to swiftly return it to victims.”
Watch: Solving real world problems with mintBlue
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
