Financial Crime World

Global Financial Institutions Impose Sanctions on Ransomware-Related Companies

Washington D.C. - In an effort to combat the growing threat of ransomware attacks, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has identified several companies and individuals that have been sanctioned for their involvement in these malicious activities.

The sanctions imposed by FinCEN are aimed at disrupting the ability of these companies to engage in illegal activities and sending a strong message to other companies involved in ransomware attacks.

Here are some of the key findings from FinCEN’s latest report:

  • Ransom Payments: The majority of ransom payments are made in Bitcoin, but there has been an increase in requests for payment in highly anonymized coins such as Monero.
  • Anonymization Techniques: Criminals are using various techniques to evade tracking, including chain-hopping and mixing transactions with those of others.

Red Flag Indicators of Suspicious Transactions

FinCEN and the Office of Foreign Assets Control (OFAC) have published an advisory listing red flag indicators of suspicious transactions that financial institutions should be aware of. These include:

  • Customers with No Experience in Crypto Asset Transactions: Suddenly attempting to purchase virtual assets in large amounts.
  • Customers Using Crypto Asset Exchanges in Jurisdictions with Less Stringent Money Laundering Regulations: Attempting to use a crypto asset exchange in a jurisdiction with less stringent money laundering regulations.

The Financial Action Task Force (FATF) has published its second 12-month review report on the FATF standards for virtual assets and virtual asset service providers. The report highlights ongoing trends in ML/TF risks associated with crypto-assets, including:

  • Regulatory Arbitrage: Misuse of VASPs/CESPs that do not comply with regulations.
  • Anonymity Methods: Use of tumblers and mixers, AECs and Privacy Coins, privacy wallets, chain hopping, dusting, DApps and DEX, and CoinJoin.

These methods are designed to obscure the connection between the originator and beneficiary, making it difficult for law enforcement agencies to trace the transactions.

Peer-to-Peer Transactions

The FATF report also notes that there has been an increase in peer-2-peer (P2P) transactions, which are transactions between individuals without the use of regulated intermediaries. The report warns that P2P transactions are more likely to be illicit and that close monitoring is necessary to address these risks.

Companies Sanctioned for Ransomware Attacks

As a result of these findings, several companies have been sanctioned for their involvement in ransomware attacks. These companies include:

  • [Company A]: Accused of using highly anonymized coins such as Monero to facilitate ransom payments.
  • [Company B]: Linked to the misuse of VASPs/CESPs that do not comply with regulations.
  • [Company C]: Accused of using tumblers and mixers to obscure the connection between the originator and beneficiary.

These sanctions are designed to disrupt the ability of these companies to engage in illegal activities and send a strong message to other companies involved in ransomware attacks.