A financial firm registered in Canada has emerged as the payment processor for dozens of Russian cryptocurrency exchanges and websites hawking cybercrime services aimed at Russian-speaking customers, new research finds. Meanwhile, an investigation into the Vancouver street address used by this company shows it is home to dozens of foreign currency dealers, money transfer businesses, and cryptocurrency exchanges — none of which are physically located there.
Richard Sanders is a blockchain analyst and investigator who advises the law enforcement and intelligence community. Sanders spent most of 2023 in Ukraine, traveling with Ukrainian soldiers while mapping the shifting landscape of Russian crypto exchanges that are laundering money for narcotics networks operating in the region.
More recently, Sanders has focused on identifying how dozens of popular cybercrime services are getting paid by their customers, and how they are converting cryptocurrency revenues into cash. For the past several months, he’s been signing up for various cybercrime services, and then tracking where their customer funds go from there.
The 122 services targeted in Sanders’ research include some of the more prominent businesses advertising on the cybercrime forums today, such as:
-abuse-friendly or “bulletproof” hosting providers like anonvm[.]wtf, and PQHosting;
-sites selling aged email, financial, or social media accounts, such as verif[.]work and kopeechka[.]store;
-anonymity or “proxy” providers like crazyrdp[.]com and rdp[.]monster;
-anonymous SMS services, including anonsim[.]net and smsboss[.]pro.
Sanders said he first encountered some of these services while investigating Kremlin-funded disinformation efforts in Ukraine, as they are all useful in assembling large-scale, anonymous social media campaigns.
According to Sanders, all 122 of the services he tested are processing transactions through a company called Cryptomus, which says it is a cryptocurrency payments platform based in Vancouver, British Columbia. Cryptomus’ website says its parent firm — Xeltox Enterprises Ltd. (formerly certa-pay[.]com) — is registered as a money service business (MSB) with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
Sanders said the payment data he gathered also shows that at least 56 cryptocurrency exchanges are currently using Cryptomus to process transactions, including financial entities with names like casher[.]su, grumbot[.]com, flymoney[.]biz, obama[.]ru and swop[.]is.
These platforms are built for Russian speakers, and they each advertise the ability to anonymously swap one form of cryptocurrency for another. They also allow the exchange of cryptocurrency for cash in accounts at some of Russia’s largest banks — nearly all of which are currently sanctioned by the United States and other western nations.
An analysis of their technology infrastructure shows that all of these exchanges use Russian email providers, and most are directly hosted in Russia or by Russia-backed ISPs with infrastructure in Europe (e.g. Selectel, Netwarm UK, Beget, Timeweb and DDoS-Guard). The analysis also showed nearly all 56 exchanges used services from Cloudflare, a global content delivery network based in San Francisco.
“Purportedly, the purpose of these platforms is for companies to accept cryptocurrency payments in exchange for goods or services,” Sanders told KrebsOnSecurity. “Unfortunately, it is next to impossible to find any goods for sale with websites using Cryptomus, and the services appear to fall into one or two different categories: Facilitating transactions with sanctioned Russian banks, and platforms providing the infrastructure and means for cyber attacks.”
Cryptomus did not respond to multiple requests for comment.
PHANTOM ADDRESSES?
The Cryptomus website and its FINTRAC listing say the company’s registered address is Suite 170, 422 Richards St. in Vancouver, BC. This address was the subject of an investigation published in July by CTV National News and the Investigative Journalism Foundation (IJF), which documented dozens of cases across Canada where multiple MSBs are incorporated at the same address, often without the knowledge or consent of the location’s actual occupant.
Their inquiry found 422 Richards St. was listed as the registered address for at least 76 foreign currency dealers, eight MSBs, and six cryptocurrency exchanges. At that address is a three-story building that used to be a bank and now houses a massage therapy clinic and a co-working space. But they found none of the MSBs or currency dealers were paying for services at that co-working space.
The reporters found another collection of 97 MSBs clustered at an address for a commercial office suite in Ontario, even though there was no evidence these companies had ever arranged for any business services at that address.
Peter German, a former deputy commissioner for the Royal Canadian Mounted Police who authored two reports on money laundering in British Columbia, told the publications it goes against the spirit of Canada’s registration requirements for such businesses, which are considered high-risk for money laundering and terrorist financing.
“If you’re able to have 70 in one building, that’s just an abuse of the whole system,” German said.
Ten MSBs registered to 422 Richard St. had their registrations revoked. One company at 422 Richards St. whose registration was revoked this year had a director with a listed address in Russia, the publications reported. “Others appear to be directed by people who are also directors of companies in Cyprus and other high-risk jurisdictions for money laundering,” they wrote.
A review of FINTRAC’s registry (.CSV) shows many of the MSBs at 422 Richards St. are international money transfer or remittance services to countries like Malaysia, India and Nigeria. Some act as currency exchanges, while others appear to sell merchant accounts and online payment services. Still, KrebsOnSecurity could find no obvious connections between the 56 Russian cryptocurrency exchanges identified by Sanders and the dozens of payment companies that FINTRAC says share an address with the Cryptomus parent firm Xeltox Enterprises. Continue reading