DOJ Sees Crypto Seizures as a Priority in Anti-Ransomware Push

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Crackdown could face hurdles if more hackers use privacy-enhancing cryptocurrencies

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“In addition to prosecuting the persons who have committed these crimes, is one of the priorities of the Department” [get to] Where we can seize and recover any proceeds that criminals may earn from ransomware attacks or other cryptocurrency crimes,” Mr. Tsao said Tuesday in the Wall Street Journal’s Risk and Compliance Forum.

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He did not provide details about whether federal officials would focus on ransoms paid by particular firms, such as owners of critical infrastructure, or amounts reaching a few dollar limits. The Justice Department did not immediately respond to a request for comment.

In June the Biden administration said ransomware gangs targeted a US pipeline operator and a meat processor, disrupting their operations and expanding efforts to track such transactions after a multimillion-dollar ransom was paid . The White House’s evolving strategy in response extends to law-enforcement and regulatory agencies.

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The Treasury Department last month approved a Russian-owned cryptocurrency exchange for allegedly aiding hackers to launder ransomware payments, in what cybersecurity experts say is the first step of its kind that will attract additional international attention. Can preview restrictions. Last week, the Justice Department said it was creating a crypto entity to zero in on exchanges and “mixer” services, which hacking groups use to move funds between different cryptocurrency addresses, aimed at allowing transactions from authorities. have to hide.

The national cryptocurrency enforcement team will also train and support ransomware cases from other law enforcement agencies, Mr. Tsao said on Tuesday.

“We’ve had to educate a lot within the department,” he said of the DOJ.

Mr. Tsao pointed to the May attack on the Colonial Pipeline Company as an example of how federal officials are adaptable to detecting and confiscating funds in such extortion schemes. In June, the Federal Bureau of Investigation took away $2.3 million in bitcoin paid for by Colonial during an attack that disrupted the East Coast’s largest conduit for fuel for six days.

Investigators can follow crypto transactions in a public ledger known as a blockchain, giving them a bird’s eye view of money changing hands in the rapidly growing ransomware economy.

The gang behind the attacks, which often operate with relative impunity in Russian-speaking countries, traded at least $350 million in cryptocurrency last year, according to blockchain analytics firm Chainalysis. Cyber ​​security experts say the total amount is likely to be much higher as some of the aggrieved companies do not report incidents.

While authorities are expanding their ability to track digital currencies, ransomware groups are similarly adapting their money-laundering strategies, Mr. Tsao said. This includes using foreign exchanges out of reach of US authorities and cryptocurrencies designed to obscure transactions and better shield owners’ anonymity.

“Cryptocurrencies present additional challenges above and beyond fiat currency,” he said.

The government says tackling cybercrime, including ransomware, requires a coordinated approach, including from other governments and the private sector.

“Just prosecuting to get out of this problem is not a solution,” Mr Tsao said, adding that working with companies would be an important part of the response, especially in the cryptocurrency sector.

The US is planning a 30-nation summit this month to discuss international cooperation in combating cybercrime.

Mr Tsao was also asked whether the Justice Department would look into the recent Pandora papers issued by the International Union of Investigative Journalists linking several politicians, public officials and celebrities to offshore tax havens, including Some were linked to financial crimes such as money. purification.

Mr. Sao said he was aware of the Pandora Papers, “but beyond that, I can’t really say much about the subject.”

He said the Justice Department has historically made combating international corruption and international money laundering a priority.

“I’ve spent a large part of my career as an anti-corruption and anti-money-laundering prosecutor,” he said. “I have no doubt that foreign officials and foreign actors are using cryptocurrencies to aid money laundering, especially corruption proceeds, and we in the department will continue to prioritize this.”

David Uberti at [email protected] and Maria Armental at [email protected]

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