Photo credit: Nathan Howard/Bloomberg

The US has ramped up sanctions against Russia following its 2022 invasion of Ukraine, and now the government agencies are taking action to target a suspected illicit Russian crypto exchange.

In its attempt to disrupt Russia’s cybercrime services, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order that identifies a crypto exchange PM2BTC for being a “primary money laundering concern” in connection with Russian illicit finance. 

At the same time, another US government agency, the Office of Foreign Assets Control (OFAC), sanctioned Sergey Sergeevich Ivanov, who is reportedly associated with PM2BTC, and Cryptex, another Russian crypto exchange. 

The Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, Bredley T. Smith, said: “The United States and our international partners remain resolute in our commitment to prevent cybercrime facilitators like PM2BTC and Cryptex from operating with impunity.”

An investigation by government agencies revealed that PM2BTC laundered convertible virtual currency tied to ransomware and other illicit actors operating in Russia.

Additionally, the Russian crypto exchange facilitated the conversion of cryptocurrencies to rubles using US-sanctioned financial institutions and failed to implement an anti-money laundering (AML) and know-your-customer (KYC) program.

Cryptex has been reported to have received over $51.2 million in funds derived from ransomware attacks. A Chainalysis report revealed that from 2018 to mid-2019, Cryptex primarily received value from its mainstream services.

However, by the fourth quarter of 2019, Cryptex began receiving value from fraudulent shops, as well as from high-risk entities, ransomware services, and terrorist financing.

Concluding their statements, the US Treasury stated, “As a result of today’s action by OFAC, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.”