US sanctions largest Russian darknet and crypto exchange Garantex

The US Treasury Department’s Office of Foreign Assets Control has announced that it will impose sanctions on darknet market Hydra and vir...



The US Treasury Department’s Office of Foreign Assets Control has announced that it will impose sanctions on darknet market Hydra and virtual currency exchange Garantex.

In an announcement Tuesday, the Treasury Department noted he had worked with the Department of Justice, Federal Bureau of Investigations, Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations to sanction the Russia-based darknet market as well as Garantex. The decision by US government agencies came on the same day as the German federal criminal police announcement he had shut down Hydra’s servers in Germany and seized over $25 million worth of Bitcoin (BTC) connected to the market.

According to the Treasury Department, the sanctions were part of an international effort to “[disrupting the] proliferation of malicious cybercrime services, dangerous drugs and other illegal offerings. Treasury Secretary Janet Yellen said ransomware operators and those who engage in other cybercrimes could operate in Russia “with impunity”, posing a potential threat to US interests.

The US government agency alleged that Garantex had “deliberately ignored[ed]“Anti-Money Laundering and Anti-Terrorist Financing requirements imposed by many regulators on virtual currency exchanges. Furthermore, he implied that the company was run by people with a “blind disregard for regulations and compliance”.

The Office of Foreign Assets investigation found that more than $8 million related to ransomware attacks passed through Hydra, while Garantex facilitated more than $100 million in transactions “associated with illicit actors and to darknet markets”. The Treasury Department worked with Estonian authorities for its investigation of Garantex, which determined that the exchange continued to conduct operations in Russia.

The Treasury Department also listing more than 100 addresses for BTC, Tether (USDT) and Ether (ETH) related to the operations of Hydra and Garantex as “specially designated nationals” – whose “assets are blocked and U.S. persons are generally prohibited from dealing with them”. In addition, the agency concluded that Hydra was “reasonably likely to cause, or to have materially contributed to, a significant threat to the national security, foreign policy, economic health, or financial stability” of the United States:

“Some virtual currency exchanges are operated by malicious actors, but others, as is the case with Garantex, Suex and Chatex, facilitate illicit activities for their own gain. The Treasury continues to use its powers against malicious cyber actors and their enablers in concert with other U.S. departments and agencies, as well as our foreign partners, to disrupt financial nodes linked to ransomware payments, cyberattacks, and other illicit activities.

Related: The World In Sync On Russian Crypto Sanctions

The actions of the US government followed the imposition by the Treasury Department of sanctions on the Russian company Suex OTC in September 2021 for allegedly allowing hackers access to cryptocurrency sent as payment for ransomware attacks. FBI agencies at the Department of Justice have since set up working groups aimed at enforcing and investigating actors using cryptocurrencies for money laundering and other cyber crimes.

Yellen is set to speak Thursday on the role of crypto in the US economy at American University in Washington, DC.