The Biden administration announced sanctions and criminal charges on Thursday, targeting Russian cryptocurrency exchanges.
These platforms are reportedly accused of facilitating payments for criminal activities, such as ransomware attacks and the sale of stolen credit card data from U.S. companies. President Joe Biden stated that these actions are part of a larger effort to disrupt a “global cryptocurrency network” and support Ukraine in its war against Russia.
“The United States will continue to raise the costs on Russia for its war in Ukraine and to deprive the Russian defense industrial base of resources,” Biden added. The announcement came as Biden met with Ukrainian President Volodymyr Zelenskyy at the White House.
The U.S. Justice Department has charged two Russian nationals in connection with money laundering schemes involving more than $1 billion in crypto transactions, allegedly used to fund global cybercriminals. Additionally, U.S. authorities seized websites tied to three illegal cryptocurrency exchanges.
Russian exchanges sanctioned and seized
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) identified PM2BTC, a Russian cryptocurrency exchange, and its associate Sergey Ivanov as a “primary money laundering concern.” The Treasury’s Office of Foreign Assets Control (OFAC) also sanctioned Ivanov and another exchange, Cryptex.
PM2BTC is accused of processing funds from ransomware attacks and other illegal activities, with half of its operations linked to illicit activity. It shares wallet infrastructure with UAPS, an underground payment processing system. Cryptex, registered in St. Vincent and the Grenadines, has been linked to over $720 million in transactions tied to Russian-based ransomware actors and cybercriminals.
The Treasury credited the U.S. Secret Service, Dutch law enforcement, and blockchain analytics firm Chainalysis for their roles in the takedown of the infrastructure related to these exchanges. Major stablecoin issuer Tether also contributed to the effort.
Sergey Ivanov and Timur Shakhmametov were also charged with conspiracy to commit and aid and abet bank fraud, with Ivanov involved in “carding” operations—trading in stolen credit card data. The U.S. State Department is offering a reward of up to $10 million for information leading to the arrest or conviction of either Ivanov or Shakhmametov.
Russia is currently testing cross-border cryptocurrency payments, following new legislation signed by President Vladimir Putin in July.
Russian central bank governor Elvira Nabiullina said that Russia’s business partners in various countries are under “tremendous pressure,” and predicted that a new global payments system independent of Western institutions would eventually emerge.
