The U.S. Treasury Department on Tuesday added 24 new entries to its list of foreign-owned cryptocurrency addresses barred from engaging in business with companies operating in the country. Sanctions placed by the U.S. government primarily effect Suex, a Czechoslovakia-based over-the-counter cryptocurrency exchange believed to have handled hundreds of millions of dollars in cryptocurrency obtained from illicit sources.
The sanctions are the result of the Biden administration’s pledge to disrupt the network of exchanges which process the conversion of cryptocurrency obtained via malware ransom payments. Biden had asked for Russia’s cooperation in dismantling the financial services support for ransomware groups like REvil, which was responsible for the Colonial Pipeline attack in May.
According to Paul Abbate, FBI deputy director, “there is no indication that the Russian government has taken action to crack down on ransomware actors,” prompting the U.S. to move to sanctions.
Despite the initial praise by several in the cybersecurity industry, the Treasury Department’s move to selectively block crypto addresses also provoked negative response from Bitcoin and privacy advocates.
“Repeat after me: stop trying to use the financial system in order to prosecute crimes after the fact,” exclaimed computer scientist and professor Emin Gun Sirer in a tweet. “The root cause of ransomware attacks is the weak state of computer security, not the mechanism used for payment.”
The Suex website, though still functioning, is now stripped of its ability to utilize the Visa and Mastercard payment processors much of its business is reliant upon, effectively dismantling its ability to do business. The company’s terms and conditions indicate it adheres to rather common AML and KYC standards, requiring provision of personal identification for transactions over $500 in value.
Future sanctions are also expected to single out specific targets but the extent to which this measure will be employed for cryptocurrency addresses is not yet known.
In Nov. 2018, the Treasury dept. blacklisted two Bitcoin addresses belonging to Iranian nationals implicated in the laundering of millions in terrorist-designated funding.