Department of the Treasury’s Office of Foreign Assets Control , in a coordinated international effort to disrupt proliferation of malicious cybercrime services, dangerous drugs, and other illegal offerings available through the Russia-based site.
“The global threat of cybercrime and ransomware that originates in Russia, and the ability of criminal leaders to operate there with impunity, is deeply concerning to the United States,” said Secretary of the Treasury Janet L.
Virtual currency is often the payment method of choice on darknet marketplaces because illicit actors who transact on the darknet often incorrectly believe virtual currencies to be an anonymous and untraceable means of exchange.
The virtual currency industry has a critical role to play in implementing appropriate AML/CFT and sanctions controls to prevent sanctioned persons and other illicit actors from exploiting virtual currencies to undermine the national security of the United States and our partners.
As reflected in Executive Order 14067 of March 9, 2022, “Ensuring Responsible Development of Digital Assets,” the Administration supports responsible innovation in digital assets, while prioritizing efforts to identify and mitigate illicit financing risks in the digital asset ecosystem.
OFAC’s investigation identified approximately $8 million in ransomware proceeds that transited Hydra’s virtual currency accounts, including from the Ryuk, Sodinokibi, and Conti ransomware variants.
Hydra is being designated pursuant to E.O.
Analysis of known Garantex transactions shows that over $100 million in transactions are associated with illicit actors and darknet markets, including nearly $6 million from Russian RaaS gang Conti and also including approximately $2.6 million from Hydra.
OFAC is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currency, and is committed to using its broad enforcement authorities to act against violations and to promote compliance.
While most virtual currency activity is licit, virtual currencies can be used for illicit activity, including sanctions evasion through darknet markets, peer-to-peer exchangers, mixers, and exchanges.
These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
For information on complying with sanctions applicable to virtual currency, see OFAC’s Sanctions Compliance Guidance for the Virtual Currency Industry here.