The US Treasury Department has for the first time sanctioned cryptocurrency exchange, a Russian-based Suex that is registered in the Moscow City business compound and operates physical as well as virtual exchanges.
Suex is allegedly responsible for over $480mn of unlawful operations, has been used for ransomware attacks and operated transfers to and from Finiko crypto ponzi scheme and Russia's largest online narcotics store Hydra. Over 40% of the transactions on Suex are allegedly unlawful and are linked to illegal incomes and at least eight types of ransomware variants, the OFAC claims.
As followed by bne IntelliNews, in the past months following recent cases of Russian-linked cyberespionage and ransomware attacks, US President Joe Biden has cranked up the pressure on Vladimir Putin to act, presenting a thorny problem for the Russian government.
The sanctions include blocking the assets of the exchange on US territory, while US citizens are banned from any transactions with Suex. The Bell reminds that one of the founders of Suex, Vasily Zhabykin, now heads the experimental crypto bank Nuum of Mobile TeleSystems (MTS) mobile operator.
Bloomberg previously reported that the US is introducing special units for combating cyber financial fraud and crimes, such as ransomware attacks, after a controversial attack on the Colonial Pipeline.
Independent Chainalysis that helped OFAC in investigating Suex sees the company as cryptocurrency trader and estimates that since being established in 2018 it has handled hundreds of millions of dollars, mostly in Bitcoins, Ethereum and Tether, mostly from unlawful and high-risk sources.
Allegedly over $24mn was received from Finiko, over $20mn from Hydra and over $50mn from BTC-e crypto exchange blocked in the US. Suex allegedly cashes cryptocurrency in Moscow and Saint Petersburg, and possibly in other offices in Russia and the Middle East.
Zhabykin reportedly owns 10% in Suex, with the largest shareholder being crypto entrepreneur Egor Petukhovsky, as well as Czech venture capitalist Tibor Bokor.
While some security experts have suggested that the hackers are state-sponsored and share both the data they glean from companies as well as the money they are paid with the state, Russia has been suffering from an explosion of cybercrime in recent years and has many well-funded, well-organised independent cyber criminal groups that have stolen as much as $6bn from domestic business and citizens in just the last year, according to expert estimates.
Cybercrimes in Russia surged practically eight-fold over the past five years, climbing to 510,000 from 65,000 offences, Deputy Secretary of Russia’s Security Council Oleg Khramov said in July.
"Rapid digitalisation is creating new IT security threats. In particular, the number of cybercrimes has grown substantially in the past five years, climbing from 65,000 to 510,000 offences," the security official said as cited by Tass.
In the meantime, in this unstable cyber fintech environment, the Central Bank of Russia (CBR) has this year finalised its plans for the issuance of the digital ruble, which is tentatively scheduled to be launched in 2022.