In what we had earlier recognized as a move by Biden government to empower the Treasury to extract reports relating to crypto taxes, just got extended by another noteworthy incident.
On Tuesday, Deputy Treasury Secretary Wally Adeyemo addressed reporters detailing that punitive sanctions would be dealt on Suex, a cryptocurrency transferring facility registered in the Czech Republic. He pronounced Suex had “facilitated transactions involving illicit proceeds for at least eight ransomware variants.” He added that more than 40% of the company’s known transaction history is “associated with illicit actors.”
The event marks the first time that any financial authority in the world has delivered such sanction against a virtual currency exchange.
This is the aftermath of a string of cyberattacks that paralyzed networks across several industries and even succeeded in breaching security barriers of U.S. government agencies. Adeyemo said ransomware extortions amounted to over $400 million in 2020 alone, exceeding four times that of 2019.
Ransomware is malware that employs encryption techniques to infiltrate into a target’s network, holding the victim’s information at ransom. They encrypt the user or organization’s critical data preventing access to files, databases, or applications, often paralyzing the entire network putting business operations to a halt. A ransom is then demanded to provide access.
What It Implies
Punitive actions imply that it will get more difficult for Suex to engage in business with U.S. nationals, given that citizens are generally barred from dealing with sanctioned entities. Financial institutions maintaining ties with them could themselves come under the glare of enforcement actions.
The move by the Biden administration was lauded by pioneers in the industry including the Binance Chief, Changpeng Zhao, who tweeted “Yesterday’s actions taken by the US Treasury Department against ‘bulletproof exchangers’ like Suex is a POSITIVE development for the industry and the future trajectory of crypto.”
Deputy Secretary Adeyemo’s tweet read: “As the President said earlier this year, we will take “any necessary action” to defend our economy and infrastructure from cyber attacks.”
US Treasury Department, yesterday, followed up their statements with a summarizing tweet: “Following new actions by Treasury to combat cybercriminals that use ransomware to take companies hostage, today @TreasuryDepSec discussed steps the Administration is taking to protect the economy and national security.”
The losses, inconveniences, and stress that entails a ransomware attack on an organization cannot be recovered or reversed. However, a move such as this must be followed by exemplary punitive proceedings; sufficient to prevent yet another “mole” functioning in the economic system.