OFAC Imposes Sanctions On Crypto Exchange Over Ransomware Payments, Warns Businesses On Sanction Risks

On September 21, 2021, the US Department of the Treasury announced that it would enforce sanctions laws against cryptocurrency exchanges that facilitate ransomware payments, as part of the Department's larger effort to combat the rising tide of ransomware. Ransomware attacks have rapidly increased in scale, sophistication, and frequency: in 2020, ransomware payments reached more than $400 million and were made almost exclusively in cryptocurrency. The recent Colonial Pipeline ransomware attack—which led to substantial disruption in US fuel supply—underscores the emerging nature of threats from cybersecurity attacks. Virtual currency exchanges are critical nodes in the cryptocurrency ecosystem, and recent Treasury actions focus on such exchanges as a way to combat ransomware attacks.