Treasury sanctions cryptocurrency exchange for enabling cyber crime

The Treasury Department sanctioned cryptocurrency exchange Garantex Europe OU, which it said has directly facilitated notorious ransomware actors and other cybercriminals by processing over $100 million in transactions linked to illicit activities since 2019. Treasury also sanctioned Garantex’s successor, Grinex, and six associated companies in Russia and the Kyrgyz Republic that have supported the exchange’s involvement in malicious cyber activities.

Details: The Treasury Department said:

• Garantex is a cryptocurrency exchange founded in late 2019, originally registered in Estonia, that conducts most of its operations from Moscow and Saint Petersburg.

• Analysis shows that over $100 million of known Garantex transactions are associated with illicit actors, including darknet markets and ransomware groups.

• Most of the funds sent to Garantex, which has maintained accounts for hundreds of thousands of users, came from other cryptocurrency exchanges used for criminal conduct.

ICBA View: ICBA in June said it strongly supports a Financial Crimes Enforcement Network proposed rule to designate the Huione Group as a primary money laundering concern, but it said more needs to be done to curtail the rapid growth of crypto scams.

Scale: The FBI reported that cryptocurrency fraud surged 66% last year, reaching almost $10 billion in losses.

Community Bank Implications: In a statement for a congressional hearing on crypto-based romance confidence scams last fall, ICBA said the persistent growth of such scams emphasizes the urgent need for policymakers to prioritize national security, counter illicit finance uses of cryptocurrency, and improve information sharing with community banks. ICBA blog posts spotlight the growth of these scams and the need for a policy response.