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In response to the growing threat of ransomware, the US Treasury’s Office of Foreign Assets Control (OFAC) has issued the most significant sanctions affecting the cryptoasset space to date.
Today, OFAC took the unprecedented step of imposing financial sanctions on the crypto-asset exchange platform, SUEX. OFAC claims that SUEX facilitated the laundering of cryptoassets from eight strains of ransomware and that about 40% of its total trade — more than $370 million — is illegal.
The SUEX stock exchange was founded in the Czech Republic and advertises its services to Russian users. It offers trading in bitcoin, ethereum, tether and other cryptoassets, and allows users to buy cryptocurrencies using Visa or Mastercard. As part of today’s action, OFAC added to its sanctions list a total of 25 bitcoin, ethereum and tether addresses known to be controlled by SUEX, which have received a total of more than $934 million in various cryptoassets.
By imposing sanctions on crypto-asset exchanges to facilitate money laundering for ransomware attackers, the US government is also sending a strong signal: it will not tolerate crypto-asset exchanges becoming conduits for ransomware attackers’ financial flows.
The impact of the OFAC designation on SUEX will be severe. Cryptoasset exchanges and individuals must ensure that they do not facilitate or participate in transactions with SUEX, or risk facing convictions from OFAC.
This action will not only affect crypto-asset transactions with SUEX. US banks will also need to ensure that they do not process fiat currency transactions on behalf of SUEX when clearing US dollar denominated transactions on behalf of banks overseas where SUEX may have accounts. The impact could be dire – effectively cutting off SUEX from any downstream access to the US dollar clearing system.
Today’s action marks the seventh time that OFAC has issued sanctions involving crypto-asset activities. OFAC has now listed more than 120 crypto addresses belonging to threat actors.
Today, OFAC also issued updated counseling to help the private sector manage ransomware sanctions risks. In it, OFAC discourages ransom payments and warns of the serious implications of ransomware payments involving sanctioned parties or countries.
How we can help
We at Elliptic offer blockchain analytics solutions to help regulated cryptoasset businesses and financial institutions comply with US and international sanctions, including those related to ransomware.
Our wallet viewing solution, Elliptical Lensand our transaction tracking solution, Elliptical Navigatorallow you to review the OFAC list to ensure you avoid dealing with blacklisted entities and addresses. Elliptic clients can review addresses from today’s actions in our solutions, ensuring they remain compliant.
Contact us for a demo and to learn more about how Elliptic’s leading blockchain analytics solutions can enable you to address the dual challenges of sanctions and ransomware.
You can also download Elliptic’s May 2021 Cryptocurrency Sanctions Compliance Guide for case studies and examples of how to use blockchain analytics for OFAC compliance.
