The Biden administration on Thursday announced sanctions and criminal charges targeting Russian cryptocurrency exchanges.
These platforms have reportedly been accused of facilitating payments for criminal activities such as ransomware attacks and the sale of credit card data stolen from US companies. President Joe Biden said these actions were part of a larger effort to disrupt the “global cryptocurrency network” and aid Ukraine in its war against Russia.
“The United States will continue to raise costs to Russia and deprive Russia of resources from its defense industrial base in the Ukraine war,” Biden added. The announcement was made as Biden met with Ukrainian President Volodymyr Zelensky at the White House.
The U.S. Department of Justice has indicted two Russians in connection with a money laundering scheme involving more than $1 billion in virtual currency transactions that were allegedly used to fund global cybercrime. Additionally, US authorities have seized websites associated with three illegal cryptocurrency exchanges.
Russian exchanges sanctioned and seized
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has identified Russian cryptocurrency exchange PM2BTC and its affiliate Sergei Ivanov as a “major money laundering concern.” The Treasury Department’s Office of Foreign Assets Control (OFAC) also sanctioned Ivanov and another exchange, Cryptex.
PM2BTC has been accused of processing funds from ransomware attacks and other illegal activities, with half of its business related to illegal activities. We share our wallet infrastructure with UAPS, an underground payment processing system. Cryptex, which is registered in Saint Vincent and the Grenadines, is allegedly involved in more than $720 million in transactions involving Russia-based ransomware attackers and cybercriminals.
The Treasury Department credited the U.S. Secret Intelligence Service, Dutch law enforcement, and blockchain analysis firm Chainaracy for their roles in destroying the infrastructure associated with these exchanges. Major stablecoin issuer Tether also contributed to the effort.
Sergei Ivanov and Timur Shakmametov were also charged with conspiracy to aid and abet bank fraud, with Ivanov involved in a “carding” business that involved trading stolen credit card data. The U.S. State Department is offering a reward of up to $10 million for information leading to the arrest or conviction of Mr. Ivanov or Mr. Shakhmametov.
Russia is currently testing cross-border crypto payments following a new law signed by President Vladimir Putin in July.
Russia’s central bank governor Elvira Nabiullina said Russia’s business partners in various countries were under “tremendous pressure” and predicted that a new global payments system independent of Western institutions would eventually emerge. .
