In A First, US Treasury Department Sanctions Virtual Currency Exchange – Technology – United States – Mondaq News Alerts
United States: In A First, U.S. Treasury Department Sanctions Virtual Currency Exchange
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The U.S. Department of the Treasury’s Office of Foreign
Assets Control’s (OFAC) on September 21, 2021, for the first
time issued sanctions against a virtual currency exchange, SUEX
OTC, S.R.O. (SUEX), for its role in facilitating financial
transactions for ransomware actors. The move by OFAC blocks
SUEX’s property in the U.S. and makes SUEX and anyone engaging
in transactions with SUEX potentially subject to sanctions.
According to OFAC, SUEX has facilitated transactions involving
illicit proceeds from at least eight ransomware variants, and over
40% of SUEX’s known transaction history is associated with
illicit actors.
OFAC described its rationale for the new sanctions by
emphasizing that virtual currency exchanges such as SUEX are
critical to the profitability of ransomware attacks, which help
fund additional cybercriminal activity. OFAC explained that
whereas some virtual currency exchanges
are merely exploited by malicious actors,
others, like SUEX, facilitate illicit activities for
their own illicit gains.
As a result of the new sanctions, all property
of SUEX subject to U.S. jurisdiction are blocked, and
U.S. persons are generally prohibited from engaging in transactions
with SUEX. OFAC’s designation of SUEX is also a
warning: financial institutions and other persons that engage in
certain transactions or activities with SUEX may expose
themselves to sanctions or be subject to an enforcement
action.
Also on September 21, 2021, OFAC issued an updated Advisory
on Potential Sanctions Risks for Facilitating Ransomware Payments,
which emphasizes that the U.S. government continues
to “strongly discourage the payment of cyber ransom or
extortion demands” and recognizes the importance
of “cyber hygiene” in preventing or mitigating
such attacks. The
updated Advisory highlights the importance of
improving cybersecurity practices and reporting to, and cooperating
with, appropriate U.S. government agencies in the event of a
ransomware attack.
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