US government imposes sanctions on crypto exchanges to curb ransomware

The US government announced sanctions against virtual currency exchange, Suex, and warned US companies it could be extremely risky to pay off hackers in a bid to disrupt the infrastructure hackers use to break into and hold hostage computer networks.

The Treasury Department’s Office of Foreign Assets Control (OFAC) claimed that nearly 40% of known transactions run by Suex were criminal.

“We are going to continue to look at the ecosystem and look for actors that are taking similar actions,” Anne Neuberger, the White House’s deputy national security adviser said in a statement.

Ransomware attacks have reportedly doubled from 2019 to 2020. These attacks involve hackers locking out an organisation from its computer system to later demand a ransom payment.

An Iowa-based New Cooperative claimed to have been hit by a ransomware attack on Monday. Fortunately, it was successful at keeping most of its business running.

The latest announcement by the government aims at lowering the profitability and frequency of such attacks, urging companies to strengthen their cybersecurity.

Also Read: PayPal completes first international rollout of its crypto offering in UK

As far as payment is concerned in case of an attack, risks may increase if crypto exchanges are sanctioned for paying ransoms, eventually breaking the law.

“Companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating OFAC regulations,” the Treasury Department said in its statement. “The U.S. government strongly discourages all private companies and citizens from paying ransom or extortion demands.”

“If a company determines that it’s in their interest to pay these demands, the OFAC guidance makes clear that the best way to protect that company from the risk of paying a sanctioned entity is to report the fact that they have been attacked to law enforcement,” Deputy Treasury Secretary Wally Adeyemo said.