United States battles ransomware and cryptocurrencies
United States battles ransomware and cryptocurrencies

United States battles ransomware and cryptocurrencies

By Fabiana D'Urso - 10 Nov 2021

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The US government continues its silent, yet possibly growing battle for a definitive crackdown on cryptocurrency movements from ransomware and illicit activities.

After the letter submitted by two senators to Congress for more clarity on the pro-tax law on crypto transactions, a new scenario of complaints opens up.

Cryptocurrencies and ransomware: the US crackdown

The Treasury Department has in fact signed a sanction on a cryptocurrency exchange levied against two operators on charges of operating through illicit gains. Around $6.1 million in funds were seized.

The Office of Foreign Assets Control (OFAC) defined the matter as follows: 

facilitation of financial transactions related to ransomware”.

The subject of the complaint and subsequent confiscation was the Chatex cryptocurrency exchange and the underlying network that supports it.

OFAC stated that a series of analyses and investigations showed that more than 50% of the transactions were widely attributable to illicit activity and likely to be connected to the darknet market.

The quality of the analysis is not in dispute, but it opens up many questions about how to counter what appears to be a continuous persecution of decentralized finance.

On 21 September, OFAC had already sanctioned Suex OTC, another cryptocurrency exchange platform, with the same definition on record, suspected illegal activity. Chatex is directly linked to Suex OTC.

The regulation of cryptocurrencies has been a topic of discussion in many conference rooms around the world for some time now.

The fear of the US government in particular is based on a basis of high inflation, which is present and rising, leaving room for a decentralized view by citizens.

For many, investing in cryptocurrencies seems to have become an almost stable solution to the instability of representative governments.

In recent days, there have been several complaints about illicit transactions in America. OFAC has also sanctioned Yaroslav Vasinskyi and Yevgeniy Polyanin in relation to ransomware attacks.

The Ukrainian and the Russian were accused of continuing to process transactions that were legally unclear (Sodinokibi/Revil).


US government criminalizes the use of cryptocurrencies

The government’s continued criminalization of those operating with cryptocurrency-related funds should be further analyzed. The two have been identified as part of a criminal group that operated through ransoms payable only in Bitcoin or Monero.

Monero has been at the centre of several incidents, including those related to espionage between Russia and America, and continues to be targeted as an exchange currency for trafficking in the shadowy world of cryptocurrencies.

The seizure carried out and ordered by the US Department of Justice (DOJ) of funds held at FTX Trading has directly accused the Russian Polyanin.

The DOJ’s definition of the seizure order has the word “independent” in it. The seizure is for approximately $6 million. The accusation is that he demanded ransom from large companies and government agencies through a criminal network that generated ransomware. The seized funds are attributable to “alleged” ransom payments received by Polyanin itself. The funds were traced to an FTX Trading Limited account in the name of Evegnii Igorevich Polyanin.

According to the indictment, Polyanin received more than $11 million in Bitcoin.

An unjustified fight

The general American political picture, which should be concerned with combating rising inflation, focuses instead on the often unjustified fight against decentralized finance and the cryptocurrency world that feeds into it.

The constant calls for regulation, or at least acceptance of free trade terms, by many members of Congress, seem to be of little value.

Cryptocurrencies, for the moment, remain a thorny issue.

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