US law enforcement targets crypto exchanges in and out of the country; Suex sanctioned

SEC SDN Coinbase Suex
“The Law” by is licensed under CC BY 2.0

Key Takeaways:

  • OFAC targeted a Russia-based crypto exchange, banning it within the US borders.
  • The exhcange allegedly hosted north of $160 million from ransomware attacks.
  • The US Government official doesn’t see cryptos lasting long without complying to regulatory actions.

YEREVAN ( – The US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a Russia-based crypto exchange, citing the threat of ransomware attacks. The Treasury added the exchange to the SDN (specially designated nationals) list, putting it in the same category as suspected terrorists.

In hindsight, the SDN is a US government sanctions and embargo measure that targets terrorists, officials of certain authoritarian regimes, and international criminals. The official reason behind the decision is the alleged facilitation of money transfers involving known ransomware attackers.

Software company Chainalysis investigated the matter. The results claim that Suex’s deposit addresses received over $160 million in crypto from “ransomware actors, scammers, and darknet market operators.”

Since opening its doors in 2018, Suex has moved hundreds of millions of dollars worth of cryptocurrency, mostly in Bitcoin, Ether, and Tether, much of which is from illicit and high-risk sources.

concluded the investigation.

Also read: SEC’s harsh policy on US crypto exchanges echoes South Korea; regulatory crackdown ahead?

US Government vs crypro exchanges

Adewale Adeyemo, the Deputy Treasury Secretary, expanded on the designation. He asserted that Suex facilitated transactions from at least eight ransomware variants. Mr. Ademoyo also added that as much as 40 percent of the exchange’s transaction volume had been obtained through “known malicious actors.”

“Exchanges like Suex are critical to attackers’ ability to extract profits from ransomware attacks. Today’s action is a signal of our intention to expose and disrupt the illicit infrastructure used in these attacks.” 

said the Deputy.

As a result of the sanctions, the US government forbids its citizens and residents to associate with the exchange. The penalties will include fines and prison time. Additionally, the Treasury will block any Suex property within the US borders.

The US law enforcement also doubled down on crypto exchanges within the country. For example, the US Securities and Exchange Commission (SEC) has threatened to file a lawsuit against a leading crypto exchange Coinbase if it launches its Lending Program. As a result, the exchange stepped down and dropped the initial plan.

Also read: Coinbase stock falls 4.4% after the exchange buckles under SEC pressure.

The Coinbase precedent

The Coinbase CEO Brian Armstrong was indignant about the SEC’s lack of guidance.

He pointed out that such interest products already exist in abundance. In a recent Twitter thread, the CEO claimed that Coinbase took the matter to the SEC, seeking legal approval. However, instead of providing guidance, the agency sprung a Wells notice, an official notification on a possible lawsuit.

Also read: SEC doubles down on crypto exchanges. Is Coinbase next?

On Tuesday, SEC chairman Gary Gensler reasserted his stance on crypto markets, saying he doesn’t see them lasting long. The trillion-dollar-plus cryptocurrency industry was bound to attract regulatory scrutiny.

“I am technology-neutral. I think that this technology has been and can continue to be a catalyst for change. But technologies don’t last long if they stay outside the regulatory framework. I believe that the SEC […] can stand up more robust oversight and investor protection around the field of crypto finance.”

commented Mr. Gensler.

Michael Saylor, the CEO of MicroStrategy (business intelligence firm) and an outspoken Bitcoin supporter, saw Mr. Gensler’s stance in a positive light. He asserted that regulatory actions would calm Bitcoin’s volatility and accelerate its adoption.

Also read: Erdogan prepares to go Rambo against cryptocurrencies like Bitcoin.

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