On April 5, 2022, the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) sanctioned darkweb Hydra Marketplace and virtual currency Garantex and added both to the Specially Designated Nationals List (SDN) [view related post].
On October 1, 2020, OFAC issued a Ransomware Advisory “to alert companies that engage with victims of ransomware attacks of the potential sanctions risks for facilitating ransomware payments.”
OFAC specifically designates “malicious cyber actors and those who facilitate ransomware transactions under its cyber-related sanctions program.” Understanding and adhering to the Advisory is very important for companies that are victims of ransomware attacks if they are considering paying a ransom.
OFAC updates the cyber-related designations, which can be accessed on the Department of the Treasury’s website, as it did on April 5, 2022 with Garantex and Hydra.
When adding Garantex to the designation list and to help prevent fraud, OFAC also listed over 100 digital currency addresses associated with SDN Hydra Marketplace and used to conduct “illicit transactions” so those involved in digital currency are aware that the addresses are illicit.
OFAC explains the implications of U.S. persons transacting any business with sanctioned individuals or entities in its announcement of the sanctions against Hydra and Garantex:
All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
OFAC has also issued Sanctions Compliance Guidance for the Virtual Currency Industry to assist compliance professionals on how to navigate this space.
We expect to see more activity in cyber designations while the U.S. continues to ramp up sanctions against Russia and its leadership.