Two Companies Sanctioned for Ransomware Payments in Cryptocurrencies
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Washington D.C. - The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has taken a significant step forward in combating ransomware attacks by sanctioning two companies involved in ransom payments made in cryptocurrencies.
Increasing Use of Anonymized Coins
The report highlights that while the majority of ransom payments are still made in Bitcoin, there has been an increase in requests for payment in highly anonymized coins such as Monero. Criminals use techniques like “chain-hopping” and mixers to evade tracing by converting virtual assets into different currencies.
Red Flag Indicators
FinCEN warned financial institutions about red flag indicators of suspicious transactions, including:
- Customers who suddenly attempt to purchase virtual assets in large amounts
- Those who send confidential coins to multiple wallets at once
These warning signs can help financial institutions identify and report suspicious transactions.
FATF’s 12-Month Review Report
The Financial Action Task Force (FATF) published its second 12-month review report on the FATF standards for virtual assets and virtual asset service providers. The report identified ongoing trends in money laundering and terrorist financing risks associated with crypto-assets, including:
- Regulatory arbitrage
- Misuse of VASPs/CESPs that do not comply with regulations
- Misuse of tools and methods to increase anonymity
Sanctions Against Two Companies
The sanctions against the two companies are part of a broader effort by FinCEN to combat ransomware attacks and other financial crimes. The agency has also issued advisories warning financial institutions about the risks associated with virtual assets and providing guidance on how to identify and report suspicious transactions.
Commitment to Disrupting Criminal Networks
“We will continue to work closely with our international partners to disrupt and dismantle criminal networks that use cryptocurrencies for illicit activities,” said a FinCEN spokesperson.
Importance of Collaboration
The sanctions are a significant step forward in the fight against ransomware attacks, which have become increasingly sophisticated and destructive. As the use of virtual assets continues to grow, it is essential that financial institutions and governments work together to prevent these types of crimes from occurring in the first place.
“We urge all financial institutions to be vigilant and take steps to identify and report suspicious transactions related to virtual assets,” said a FATF spokesperson. “The fight against money laundering and terrorist financing is an ongoing effort, and we will continue to provide guidance and support to our members to help them meet their obligations.”