It’s no longer going to be a free ride for bad actors in the crypto scene as U.S. regulatory agencies are beginning to take action against these players. The latest to feel the wrath of the regulators is Russia-based cryptocurrency exchange, Suex who the US Treasury’s Office of Foreign Asset Control recently sanctioned.
According to the Treasury Department, Suex was sanctioned because of the role it has been playing in enabling payment for ransomware gangs, scammers, and even the defunct exchange, BTC-e, which was shut down by the U.S. Department of Justice two years ago.
In its official release, the US department added 25 addresses associated with Suex to the Specially Designated Nationals List which usually included terrorists, war criminals, authoritarian regimes, and the likes. The addresses in the release include ETH, BTC, and USDT addresses.
Ransomware has become a significant issue after recent high-profile attacks on infrastructure in the US. In 2020, ransomware attacks rose by 300%. These attacks affected the supply chain and other critical infrastructures as cybercriminals had control of critical information. A notable case was the Colonial Pipeline attack which forced the company offline for six days.
Chainalysis Played a Role in the Investigation
OFAC didn’t work alone on this. It partnered with the crypto analytics company, Chainanalysis in the investigation. Chain analysis discovered that in the past three years, Suex had received 160 million worth of Bitcoin. These funds came from various shady sources, including deposits from darknet markets, including the largest, Hydra.
According to the Global Public Sector Chief Technology Officer for Chainalysis, Gervais Grigg, the firm has been investigating Suex for some time before the Treasury Department also got involved. In his opinion, disrupting the supply chain is the best way to deal with the ransomware issue.
Most cybercriminals demand payments in cryptocurrencies due to the anonymity it provides. Though the bulk of crypto activities are legal, bad actors’ exploitation remains a significant issue. Ransomware has also become a major political issue recently. Thus, government agencies have developed an interest in crypto exchanges, especially those used to facilitate such attacks.
Interestingly, Suex is registered in Prague and its two physical offices are in St. Petersburg and Moscow. According to reports, 40% of the transactions on the exchange involve unlawful activities. With this sanction, we can expect more sanctions against crypto exchanges that are aiding bad actors.