DeepDotWeb Is Charged by US Authorities for Using Crypto for Money Laundering and Illegal Kickbacks

Money laundering seems to be a major concern amongst regulators around the world with cryptocurrency, and the fact that these scams continue to arise isn’t helping. Recently, yet another situation arose, but the US authorities have already charged an alleged group of moderators of DeepDotWeb. The moderators have been accused of money laundering, accepting illegal kickbacks, and other criminal activity.

The dark web comparison and news site was seized as Tal Prihar (37) and Michael Phan (34) were arrested. While Phan was arrested in Israel, Prihar was taken in France, according to the US indictment that was only unsealed on Wednesday. In Brazil, there is supposed to be constitutional protection from extradition, but the policy only applies to naturalized citizens, so it did not apply to Prihar.

Rather than choosing to arrest Prihar while in Brazil, the authorities made it possible to make the arrest in France instead, finding him in a flight somewhere between Brazil and Israel. Furthermore, while investigating in Brazil, the authorities claim to have found $200,000 in fiat currency, along with an “undisclosed amount” of Bitcoin and other crypto assets that have yet to be announced.

As the authorities see it, the affiliate system of DeepDotWeb is a “kickback” scheme, in that the two arrested suspects received payments for the business that they brought into the dark web. Furthermore, it appears that the individuals were looking to hide their actions with the use of Bitcoin, holding crypto assets on OKCoin and Kraken, along with the BitPay payment processor.

The prosecutors say that that 8,155 Bitcoins were collected by the initiative, spanned over the course of multiple years. In total, the haul is believed to worth $15.4 million. The prosecutors added that Prihar and Phan moved the “illegal kickback payments” from their DDW wallet for Bitcoin to other accounts, along with the accounts that they have created under shell companies.

Scott Brady, the US attorney in Western Philadelphia, spoke at a press conference, saying that these arrests made in this case is “the single most significant law enforcement disruption of the dark net to date.”

According to CoinDesk, there has been another suspect arrested in the process, but that individual has not been named. To read the full indictment, visit here.