Cryptonator taken down

[NotATether]

https://www.bleepingcomputer.com/news/cryptocurrency/cryptonator-seized-for-laundering-ransom-payments-stolen-crypto/

U.S. and German law enforcement seized the domain of the crypto wallet platform Cryptonator, used by ransomware gangs, darknet marketplaces, and other illicit services, and indicted its operator.

The alleged Cryptonator's operator, Roman Boss, has been charged with money laundering and running an unlicensed money service business operation.

Cryptonator is an online cryptocurrency wallet launched in 2014 that allows users to store crypto and exchange between other cryptocurrencies within their personal wallet.

Blockchain investigation firm TRM reports that Cryptonator failed to implement anti-money laundering controls, enabling anonymous or pseudonymous users to use the service, including for illicit activity.

The Cryptonator project's primary domain at "cryptonator.com" has now been seized, displaying the below notice from "seized-domain.s3-us-gov-east-1.amazonaws.com."

The law enforcement action involves the U.S. Department of Justice, the FBI, the IRS:CI, the National Cryptocurrency Enforcement Team, the German Federal Criminal Police Office (BKA), and the Attorney General's Office in Frankfurt am Main.

So long, I guess? Cryptonator was my very first wallet when I cashed out some $6 worth of DOGE to there, however I quickly moved on to more secure, non-custodial BTC wallets.

I guess this is pretty damning for anyone trying to host online wallet software. Anybody creating an online wallet is now treated like an exchange, and thus, a criminal. Something like this happened with Samourai before.

They have been facing a lot of scam accusations before this, I can only think it's because the operator realized that his days were numbered I guess.

edit: Oh, and everyone who still had coins in this custodial wallet has been rug-pulled by the feds.

[BitcoinGirl.Club]

I was not familiar with this company until now. This is a sad news after all

edit: Oh, and everyone who still had coins in this custodial wallet has been rug-pulled by the feds.

There is always this risk. I do have some coins always in some exchanges just to fill some orders when there is an opportunity but for some reason if I lose it then I can afford the loss. It's okay as long as you can afford the loss.

[Stalker22]

So Cryptonator got shut down as a custodial wallet.  But was that because they held people's crypto like a bank? Or because they let folks trade it without oversight like an exchange? Seems like both and  storing assets invites crime - we know this.  But they took more risk enabling trades too, skirting laws. 

This whole mess says to me regulations matter when handling other people's money.  Cant just take risks and expect no blowback down the line.  Cryptonator found out the hard way.

[LTU_btc]

I remember this name already from my early days in crypto, though, never used their services. So, as I understand that after mixers now feds started chasing crypto wallets. That's not good trend and I would say it's worrying.
It's said that ''Cryptonator, used by ransomware gangs, darknet marketplaces, and other illicit services'' - basically they can accuse every online wallet service which don't have KYC for such things.
That's another reason not to use custodial wallets, but now every person who used Cryptonator have lost it like all of them would be criminals.

[Potato Chips]

So Cryptonator got shut down as a custodial wallet.  But was that because they held people's crypto like a bank? Or because they let folks trade it without oversight like an exchange? Seems like both and  storing assets invites crime - we know this.  But they took more risk enabling trades too, skirting laws.  

This whole mess says to me regulations matter when handling other people's money.  Cant just take risks and expect no blowback down the line.  Cryptonator found out the hard way.

Yeah, should've just integrated known instant exchanges like other wallets and earn as an affiliate or something but they must've wanted more profits.

In addition, it appears the issue is more than just not complying to KYC/AML policies because they actually supported some shady services? 🤔

"Tickets also indicate that Cryptonator offers API keys to darknet marketplaces and the like, such as a bullet-proof hosting service, and a shop selling cached credentials for credit card companies," reads the complaint.

"Based on my training and experience, and in my investigation to date in this case, this is important b ecause it means that Cryptonator is offering its customers the ability to easily access criminal services."

[examplens]

I have never used this wallet, but now I am glad it is so.

But why do people need to use a large number of different wallets? Isn't that just an unnecessary complication? Now there are already a lot of good multicurrency solutions, so the justification that some wallets do not support a certain coin or token is not adequate

[tabas]

I have never heard of them

I guess this is pretty damning for anyone trying to host online wallet software. Anybody creating an online wallet is now treated like an exchange, and thus, a criminal. Something like this happened with Samourai before.

This is scary.
The thought that most online wallets are being used for shady activities will be like having a domino impact in eyes of the law enforcement. I guess this is an exchange of how freedom is to us and soon, even custodial or non custodial wallets might be forced to ask every user to do kyc.

[BitMaxz]

I heard cryptonator before but never used them we know that any online-related wallets are not safe, less secure and vulnerable to online attacks which is why I only use Electrum wallet and Bitcoin core and nothing else. For other cryptos, I use only the official wallets and the most common wallets like metamask and Ronin for web3.

Cryptonator looks the same as Coinbase the service they offer seems to be the same the only thing unique is the "Anonymous & secure" service which I think is the reason why it was taken down.
If it's just an AML/KYC policy, the government won't do that but to force them to collect data from their customers.

I hope other users will be cautious when choosing wallets or exchanges because almost all exchanges or wallets that can be used for money laundering are often targeted by the authorities.

[Poker Player]

Lol, I used it years ago too. For a short time, few transactions and low amount. Also when I was starting in this and still didn't have a HW. It was an online wallet without KYC, of which there are less and less left, in the end, to avoid the accusation of money laundering they are going to force KYC prior to using the site.

[Upgrade00]

But why do people need to use a large number of different wallets? Isn't that just an unnecessary complication? Now there are already a lot of good multicurrency solutions, so the justification that some wallets do not support a certain coin or token is not adequate

The only other reason I can think of is those that chase newly launched projects which have their own custom wallet or are not listed on the top reputable wallets yet.
This is also the reason people use different exchanges when one or two realistically should be enough for all trading activities.

[Z-tight]

I am not going to lie, i am hearing the name 'cryptonator' for the first time. Checking online, this wallet functions just like an exchange, because one can exchange one crypto to another in it. The regulators are surely going to go after services like this which do not require kyc and charge them for money laundering, so no real surprises here.

edit: Oh, and everyone who still had coins in this custodial wallet has been rug-pulled by the feds.

True, you can put it that way. Anybdoy who has funds in a custodial wallet should know that they can lose it at anytime, not your keys, not your coins.

[FatFork]

I've heard of them before, but never used. I doubt regulators shut it down over paperwork. No, taking down the whole operation implies Cryptonator enabled activities authorities deemed illegal. We can only speculate. But this mess confirms why self-custody beats trusting these mainstream platforms with unclear incentives or security standards.

[Don Pedro Dinero]

I remember receiving my first signature campaign payments at an address there. Then, of course, I got better informed and ended up buying a hardware wallet, with which I could also sign messages to secure my account here. It was never a very famous site, nor was it much talked about, so I'm not surprised that many of you don't know about it. In any case, it's a pity.

[ABCbits]

I have doubt criminal would actually use custodial service, especially when it would leave trace and the platform receive some scam accusation.

edit: Oh, and everyone who still had coins in this custodial wallet has been rug-pulled by the feds.

And it's not the first time either. This case reminds me of BTC-e case which happened about a decade ago. And it's another reason to avoid custodial service.

[DaveF]

.....
edit: Oh, and everyone who still had coins in this custodial wallet has been rug-pulled by the feds.

Have not used it and don't know a thing about it, but from another thread about them getting taken down:

...
Is Cryptonator Safe?

Some of the security features that the wallet offers are:
#1 Control Of The Private Keys
This feature allows you the complete control of your private keys from the onset. Thus, the coins are not vulnerable to theft. This gives power and surety in the user's hand, and the holders can take measures to keep their funds safely.

...

Yes that is as of 4+ years ago so who knows what has changed since then, but in theory people still have access to their crypto.

Now if people actually kept their seed / private keys who knows.
And we unless people complain we will never know if anything else changed about that.

But, in theory unless you were in the middle of an exchange you people still should have their money (this time).

-Dave

[NotATether]

...
Is Cryptonator Safe?

Some of the security features that the wallet offers are:
#1 Control Of The Private Keys
This feature allows you the complete control of your private keys from the onset. Thus, the coins are not vulnerable to theft. This gives power and surety in the user's hand, and the holders can take measures to keep their funds safely.

...

Yes that is as of 4+ years ago so who knows what has changed since then, but in theory people still have access to their crypto.

I do not recall seeing any option for viewing private keys when I used the site (a year before that guy posted). Definitely no seed phrase either. It was username/password driven.

[ABCbits]

...
Is Cryptonator Safe?

Some of the security features that the wallet offers are:
#1 Control Of The Private Keys
This feature allows you the complete control of your private keys from the onset. Thus, the coins are not vulnerable to theft. This gives power and surety in the user's hand, and the holders can take measures to keep their funds safely.

...

Yes that is as of 4+ years ago so who knows what has changed since then, but in theory people still have access to their crypto.

Since there are different information, i did quick google search. But it leaves more question since many website show different information.

Private keys: Held by a third party

Your private keys are stored by a third party with easy access to them • Low anonymity • Easy to use

Private keys are stored by Cryptonator

Unlike some other cryptocurrency wallets, this one allows you full control of your private keys.

Full control over private keys: In case of an online attack, hackers are capable of gaining access to the user’s private keys. For this reason, Cryptonator provides users with full control of their private keys. They can export and store them in the best place they see fit. 

I also found their help page on https://cryptonator.zendesk.com/hc/en-us, but there's no concentrate answer whether Cryptonator is custodial or not.

[DaveF]

From what @ABCbits found and what @NotATether experienced I am *100% guessing* that the site went thought a bunch of changes over the years and how they operated changed over time too.

Could be as ownership changed or other things happened they started doing things differently. Or it could have all been scams / lies from the beginning.

Lets be honest after setting up a new wallet and getting your seed phrase how many people actually then take that phrase and put it into a mnemonic checker to make sure that that it generates the same addresses. Or if they give you private keys that they are actually valid.

-Dave

[dkbit98]

I saw this news few days ago but I never used Cryptonator in my life and I didn't care much about this.
First I thought this was some kind of mixer with similar name, than I thought it was some exchange, but it turned out to be a custodial wallet.
I checked archived website on wayback machine and I am sure that I never used that service.
Better stop using all custodial crypto services as wallets, that includes exchanges, regulators can seize them at any time.
I guess U.S. German and other authorities have nothing better to do in their life now... 

[bbc.reporter]

On Exodus wallet, their users can also exchange their cryptocoins to other cryptocoins within the wallet. Does this imply that this wallet is also in danger of being accused of moneylaundering and other illegal activities?

This is certainly very headshaking because to use a similar argument from the arguments created before this, why imprison the creator of the tool if the tool was used for criminality? If a bank robber used a certain car to rob a bank, does this imply that the creator of the car can also be implicated with the crime?