In early October the Interior Ministry and the National Guard mounted a sweeping operation to detain almost 100 people suspected of running illegal cryptocurrency operations. Six alleged key figures were placed under house arrest, among them Cryptex founder Sergei Ivanov.
Notably, the sweep came soon after US authorities offered a reward of up to $10m for information on Ivanov’s whereabouts. Gregory Osipov, director of investigations at SHARD, shares with ForkLog why Cryptex attracted the attention of both American and Russian authorities and how the case may affect market regulation.
The author’s opinion may differ from the editorial stance. The individuals mentioned are presumed innocent until a court decision.
What Cryptex is accused of
On September 26, 2024 US authorities added Russian citizens Sergei Ivanov and Timur Shakhmametov to sanctions lists, suspecting them of organising bank fraud.
The charges concern their payment processing for carding sites Rescator and Joker’s Stash. The latter, according to authorities, was used to attack the United States’ critical financial infrastructure.
A reward of up to $10m was announced for information on the suspects’ whereabouts. Alongside Ivanov and Shakhmametov, sanctions were extended to affiliated companies Cryptex, Universal Anonymous Payment System (UAPS) and BTC2PM.
And by October 2, 2024 Russia’s Investigative Committee had opened a criminal case against the creators of the anonymous payment system UAPS and the cryptocurrency exchange Cryptex. They are suspected of forming a criminal organisation, unauthorised access to computer systems and illegal banking activity.
Searches were carried out in several regions of Russia. Police brought in 96 people, but the court placed only six under house arrest: Sergei Ivanov, Alexander Tereshchenko, Artem Lysenko, Elena Polyakova, and brothers Ruslan and Roman Orekhovsky.
Investigators allege that more than 112 billion roubles flowed through UAPS and Cryptex in 2023. The defendants’ unjustified income is estimated at 3.7 billion roubles.
According to a journalistic investigation by cybersecurity specialist Brian Krebs, Ivanov and Shakhmametov had processed payments since the early 2000s and in 2013 created the anonymous Universal Anonymous Payment System, which served the shadow crypto market.
Funds from services such as Joker’s Stash and BriansClub, which sold stolen card data, were cashed out via the platform. In 2018 the suspects launched the Cryptex cryptocurrency exchange and, to cover unlawful activity and launder money, organised a network of exchangers including btc2pm and PinPays. The platforms were used by both criminals and law-abiding users.
Reputational damage
For advocates of banning cryptocurrencies, the Cryptex case is further confirmation of links between digital assets and carding services, underground casinos and ransomware.
The services that drew law-enforcement scrutiny conducted little user identification (KYC) and ignored anti–money-laundering (AML) rules, offering clients complete anonymity. In tightly regulated jurisdictions such activity is illegal, yet Cryptex and UAPS remained on the market for suspiciously long.
Recent raids and detentions show that authorities had long known about Cryptex not only in the US but also in Russia. These services helped hackers who breached American systems, extorted companies and stole funds from cards. Despite the scale of the operation, all detainees were placed under house arrest. Presumably, in the view of a Russian court, they do not pose a serious threat to the state.
In the US the standing of platforms linked to Russia has sunk still lower: an equals sign is drawn between Russian crypto services and money laundering. To American authorities they are systemic cybercriminals causing billions in losses.
Possible consequences
The notion that any exchange, broker or payment system dealing in cryptocurrencies is indistinguishable from Cryptex and UAPS may suggest that the authorities want to ban or de-anonymise all market participants. In reality the picture is more nuanced.
Because Russia lacks clear legislation, any crypto service can formally fall under the definition of illegal banking. Crypto turnover sits in a grey zone, yet an infrastructure already exists: mining, exchange services and crypto payments. The market awaits regulation, or at least an “experimental legal regime”.
Russia’s crypto market has both large and small players. The former favour legalisation, clear rules, user verification and AML compliance, and are ready to engage with state bodies.
But part of the market still insists on full anonymity, avoiding centralised exchanges and verification. To the state, however, anonymity is increasingly associated with suspicious activity: drug and arms trafficking, money laundering and hacking.
The takeaway from the Cryptex case for investors is simple: choose the most transparent platforms—those that undergo audits, verify customers and comply with AML. This helps avoid links to illegal activity and enhances safety.
The Cryptex case is a cautionary tale, underscoring the association between cryptocurrencies and illegal activity. When hidden risks surface, authorities tend to favour prohibitions over flexible policies to prevent—or at least mitigate—the harm caused by bad actors.
One hopes the case will not trigger new initiatives aimed at tighter controls or outright bans.
The situation around Cryptex shows that US regulators remain active in fighting the illicit use of cryptocurrencies and in shutting down services and exchanges that facilitate such operations. Enforcement will only intensify.
For crypto companies the signal is clear: fully anonymous services are no longer viable, as regulators increasingly link them to criminal activity.
In Russia the situation remains less defined due to the absence of clear regulation. Once it appears, the experience of foreign counterparts will likely be taken into account and applied.
The Cryptex case suggests that the future of the crypto industry lies in transparency and compliance, as regulators increasingly associate anonymous crypto services with illegal activity.