The US Treasury Department has announced that it will sanction a cryptocurrency exchange for its role in ransomware attacks. This is the first action by Biden’s administration against a virtual currency exchange as the government fights the increase in such attacks. Here’s what’s happening.
What prompted the Treasury sanction?
When speaking to reporters in a press call, Treasury Deputy Secretary Wally Adeyemo said that this sanction signifies the government’s intention to expose and disrupt the illicit infrastructure using these ransomware attacks.
In a press release, the Treasury says it took action against the Czech Republic-based SUEX for its participation in facilitating financial transactions for ransomware actors. According to the statement, SUEX has aided transactions involving illicit proceeds from at least eight ransomware variants.
In addition, from the government’s analysis of SUEX’s known transactions, about 40% are associated with illicit deals. Because of this, the crypto exchange got sanctioned according to Executive Order 13694 for its role in providing material support to the threat posed by criminals and helping to fund cybercriminals.
What are the implications of this sanction?
With this sanction, SUEX’s actions within the US borders are limited. The government has directed that,
- All property and interests in property of SUEX within the US jurisdiction are blocked.
- US persons are prohibited from engaging in transactions with the crypto exchange.
- Any entities 50% or more owned by SUEX are also blocked.
- Financial institutions and anyone that engages in certain transactions or activities with SUEX crypto exchange may expose themselves to sanctions or be subject to enforcement action.
The rise of ransomware attacks globally
Ransomware has become a big problem in recent times. Hackers use this channel to take down systems that control major sectors while demanding hefty payments in cryptocurrency.
Following the Colonial pipeline attack that led to temporary fuel supply shortages, president Biden signed an executive order to help improve the country’s cybersecurity. Such other attacks have hit several US companies, such as JBS Foods International, the country’s second-largest meat producer.
According to the deputy national security adviser for cyber, Anne Neuberger, ransomware payments had reached over $400 million, four times more than in 2019.
Because of this worrying trend, the US government is stepping up its fight against such attacks, starting with SUEX. In addition, instead of disrupting the entire cryptocurrency market, the focus is more on individual exchanges, traders, and mixers.
While this is a major step, more still needs to be done to curb these ransomware attacks.
