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US Treasury Department Sanctions Russian Darknet Market and Crypto Exchange

UTC by Mercy Tukiya Mutanya · 3 min read
US Treasury Department Sanctions Russian Darknet Market and Crypto Exchange
Photo: Unsplash

Hydra Market is the largest and most widely used darknet market in the world. It was founded in 2015 and offers services such as ransomware-as-a-service (RaaS), hacking, counterfeit currency, illicit drugs, stolen crypto and personal information and software.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned the Russian darknet market Hydra and crypto exchange Garantex. In a Tuesday press release, the Department of the Treasury revealed that action was taken against the Russian-based entities as part of an international effort to curb the spread of malicious cybercrime services, illicit drugs and other illegal activities enabled by the sites.

Secretary of the Treasury Janet L. Yellen commented:

“The global threat of cybercrime and ransomware that originates in Russia, and the ability of criminal leaders to operate there with impunity, is deeply concerning to the United States. Our actions send a message today to criminals that you cannot hide on the darknet or their forums, and you cannot hide in Russia or anywhere else in the world. In coordination with allies and partners, like Germany and Estonia, we will continue to disrupt these networks.”

Hydra Market is the largest and most widely used darknet market in the world. It was founded in 2015 and offers services such as ransomware-as-a-service (RaaS), hacking, counterfeit currency, illicit drugs, stolen crypto and personal information and software.

The operation against Hydra was run by the  US Department of Justice, Federal Bureau of Investigations, Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations. It was also aided by the German Federal Criminal Police who shut down Hydra servers in that country and managed to seize Bitcoin worth $25 million.

OFAC is also identifying more than 100 crypto addresses linked to Hydra’s illicit operations and will share more as and when they become available. The addresses are listed as “Specially Designated Nationals” that US citizens are prohibited from dealing with.

The Garantex crypto exchange was founded in late 2019. It was registered in Estonia but mainly operates out of Russia. The Treasury Department reveals that over $100 million in transactions on the exchange are linked to dark web markets and illegal activities. The Garantex sanctions follow similar action taken against Russian-based virtual assets exchange Suex OTC in September last year for allegedly permitting hackers to access crypto realized as payment for their ransomware attacks.

While acknowledging that the bulk of crypto activity is legal, the Treasury department addressed the use of virtual currency for illegal activities and the role that some exchanges play in this:

“Some virtual currency exchanges are exploited by malicious actors, but others, as is the case with Garantex, Suex and Chatex, facilitate illicit activities for their own gains. Treasury continues to use its authorities against malicious cyber actors and their facilitators in concert with other US departments and agencies, as well as our foreign partners, to disrupt financial nodes tied to ransomware payments, cyber-attacks and other illicit activity.”

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Mercy Tukiya Mutanya

Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student. She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.

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