The Treasury Department announced that in conjunction with domestic federal law enforcement partners, its Office of Foreign Assets Control (OFAC) has imposed sanctions on Hydra, the world’s largest darknet market, and Garantex, a virtual exchange office.
Both are largely based in Russia, with the former actively working to enable ransomware criminals and the latter being sanctioned for working in the Russian financial sector.
“The global threat of cybercrime and ransomware originating in Russia, and the ability of criminal leaders there to operate with impunity, is of deep concern to the United States,” Treasury Secretary Janet L. Yellen said in a statement. press release dated April 5.
“Our actions today send a message to criminals that you cannot hide on the darknet or their forums, and you cannot hide in Russia or anywhere else in the world,” Yellen added. “In coordination with allies and partners, such as Germany and Estonia, we will continue to disrupt these networks.”
The Treasury called Hydra the “most important” darknet market in Russia and the largest in the world. The market was shut down in coordination with the German Federal Criminal Police, who shut down Hydra servers in Germany and seized $25 million in bitcoins in the process.
The market was known to offer offers such as ransomware as a service, hacking services and software, stolen virtual currency, and more. The Treasury said OFAC had traced about $8 million in ransomware profits to the market through its investigation.
As for Garantex, the virtual currency exchange was initially established in Estonia, but the Treasury said the majority of its operations were carried out in Moscow, Russia. The sanctions and investigation were conducted in conjunction with Estonian authorities, with the former designed to help prevent sanctions evasion by Russian nationals.
“Russia is a haven for cybercriminals. Today’s action against Hydra and Garantex builds on recent sanctions against virtual currency exchanges SUEX and CHATEX, which, like Garantex, operated from Federation Tower in Moscow, Russia,” said the Treasury in the press release. “The Treasury is committed to taking action against players who, like Hydra and Garantex, willfully ignore Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) obligations and allow their systems to be abused. by illicit actors.”
Under the sanctions, any property or interest in Hydra or Garantex that is in the United States or in the possession of US citizens must be reported to OFAC.
The actions follow a surge by the federal government to stop cybercriminals targeting virtual currencies, including the launch of the FBI’s Virtual Assets Unit, the indictment of a crypto fraudster by the Department of Justice and the largest seizure ever by the Department of Justice, in the form of $3.6 billion in bitcoins seized.