Tag Archives: ransomware

OFAC Cryptocurrency Regulation


The Office of Foreign Assets Control (OFAC) recently surprised the crypto community by designating two well-known cryptocurrency mixers, Blender.io and Tornado Cash, as Specially Designated Nationals (SDNs).

The sanctions come after OFAC issued Sanctions Compliance Guidance for crypto firms in September of 2021, which raised questions with crypto enthusiasts – is this the start of sensible regulation of the industry, or a threat to crypto’s decentralization and anonymity?

This article will explain everything you need to know about OFAC, its regulations, and what it means for the cryptocurrency world.

What is OFAC?

The US Treasury Department’s Office of Foreign Assets Control is a financial intelligence and enforcement organization. Their primary objective is to enact America’s national security and foreign policy goals and enforce economic and trade sanctions.

OFAC conducts its operations against foreign states and individuals, and a range of other entities such as terrorist organizations, that are deemed a threat to US national security interests.

OFAC Sanctions Procedures and Requirements

OFAC’s Sanctions Compliance Guidance provides the principles of US compliance obligations for the cryptocurrency industry.

OFAC highlights the idea that crypto firms doing business in the US will be treated the same as any other US company that transacts in traditional currencies. As a result, crypto firms must follow OFAC regulations just as any other company would.

Furthermore, the OFAC guidance explains cryptocurrency firms’ obligations to prohibit, reject, and disclose transactions involving sanctioned entities (such as SDNs).

The Guidance emphasizes that failure to follow OFAC standards may result in fines or other repercussions. It further stresses that working with OFAC and developing a robust compliance program may be mitigating factors when they are contemplating fines for alleged infractions.

OFAC Regulation of Cryptocurrency Firms

OFAC’s mounting worries about unlawful activities in the crypto space have prompted them to take these steps to regulate cryptocurrency firms. In the Sanctions Compliance Guidance, the agency lists five recommendations for firms to comply with OFAC regulations:

  • Commitment From Company Management

According to OFAC, sanctions compliance programs must receive the proper controls and resources. They highlight the significance of management buy-in in establishing an efficient compliance program.

This implies leaders must have a direct role in assessing and implementing these standards, and provide ample resources, including human and technological capital.

  • Risk Analysis for Frequently Finding Vulnerabilities

Businesses thoroughly evaluate their interactions with third parties to look for any possible noncompliance issues. In addition, crypto firms must examine potential sanctions risk from the start, depending on the services they plan to provide.

By doing this risk assessment early in the company’s life cycle (for example, before beta testing) crypto firms can create a solid sanctions compliance mechanism ahead of seeing substantial user growth, reducing the possibility of sanctions violations.

  • Internal Controls

Firms must have adequate internal controls in place to comply with OFAC’s five-pronged sanctions compliance framework, with a focus on the ability to detect and respond to problematic transactions.

Crypto firms need to regularly evaluated their risk of doing business with sanctioned entities, and users based in countries that are subject to severe sanctions, such as Iran, Venezuela and North Korea.

If these risks materialize, internal controls must be prepared to deal with them, escalate them and record them. Part of the job entails exercising due diligence to safeguard the firm, its clients and business partners.

  • Testing and Auditing

Auditing can be used to assess the success of compliance initiatives. As the threats evolve over time, firms may need to recalibrate their defenses accordingly.

Crypto firms can alert themselves of potentially fraudulent transactions, or transactions by sanctioned entities, by using tools such as Bitcoin Who’s Who. Firms can quickly and easily assess their potential risk of exposure to sanctions risk based on our unique dataset.

  • Staff Training

Training is vital since staff awareness heavily influences the effectiveness of a compliance program. Organizations should regularly provide job-specific training to their employees to ensure they’re on the same page with management. Employees should always be aware of their duties in preventing sanctions violations and current OFAC best practices.

What is the SDN List?

The Specially Designated Nationals and Blocked Persons List (SDN List) is a US government santion/embargo mechanism that targets US-designated terrorists, foreign government officials, and international criminals (for example, drug cartels).

Thousands of firms, organizations and individuals are on the SDN list because the US deems them a threat to national security. Persons and enterprises in the US are prohibited from doing business with entities on the list.

Companies on the list can suffer penalties including a prohibition on stock purchases in the company and their majority-owned subsidiaries, as well as a prohibition on issuing new debt with a maturity of more than 90 days.

Why is OFAC Sanctioning Crypto Companies?

OFAC’s sanction programs are designed to defend the US from threats to national security and to further US foreign policy goals. Since OFAC exists to impose sanctions on any entities whose financial or trade-related acts jeopardize US security, the possibility of cross-border money laundering or hacking via crypto has made these firms a target.

For example, consider the case of Tornado Cash. The service can be useful for people who genuinely need financial privacy, such as those who wish to make anonymous donations, or need their financial information kept private for legitimate reasons. However, cryptocurrency mixers like Tornado Cash are also appealing to cybercriminals looking to launder money, which is why OFAC is taking action against such companies.

Tornado Cash’s role in laundering over $455 million in cryptocurrency stolen from Axie Infinity’s Ronin Bridge protocol by the Lazarus Group (a hacking group with ties to North Korea) was cited as a reason for the OFAC ban, as was Tornado’s receipt of stolen funds from Harmony Bridge and Nomad Bridge previously.

SDN List Placement and Removal

When OFAC assigns an entity to the SDN list, it provides the rationale behind the action. Typically, the Treasury Department issues a report explaining the reasons for the blacklist, which can then be addressed by the sanctioned entity.

In order to obtain removal from the SDN list, an entity must file a petition for removal or a request for administrative consideration with OFAC. This administrative consideration requires the sanctioned person or company to argue that their behavior has changed and that it will no longer engage in the prohibited actions. Removal in some cases is possible if the entity can demonstrate that OFAC was mistaken when placing them on the blacklist.

OFAC evaluates these requests upon receipt and typically responds by asking numerous questions to obtain the complete picture. This questioning can be repeated several times, and may take months or even years to complete, depending on the complexity of the case.

OFAC Sanctions on Major Crypto Companies

  • Blender.io

Blender was the first bitcoin company to be added to the SDN list. The mixer service was blacklisted and sanctioned due to their involvement in laundering proceeds from a bitcoin heist linked to the game Axie Infinity.

  • Tornado Cash

On August 8th, 2022 OFAC sanctioned Tornado Cash for helping cybercriminals to launder $7 billion in cryptocurrency since 2019. According to an OFAC news release, the Lazarus Group used the mixer to launder about $455 million in stolen money. Tornado Cash was sanctioned following the Blender sanction and enforcement actions against mixers Bitcoin Fog and Helix.

  • Lazarus Group

The Lazarus Group is a North Korea-linked hacker group which has allegedly engaged in multiple crypto heists and then used mixers to launder the stolen funds. According to OFAC, the money is then used to support North Korea’s nuclear and ballistic missile development.

  • Iran-Linked Ransomware

On September 14, 2022 ten individuals and two companies were added to the SDN list. They are accused of taking part in and funding ransomware activities in Iran. OFAC says the gang is connected to the Islamic Revolutionary Guard, and has been exploiting software flaws to spread ransomware, steal data, and access computers without permission.

Along with the entities placed on the list, OFAC also banned several BTC addresses which allegedly belong to Ahmad Khatibi Aghada, who was born in Iran. However some of the addresses have never received a bitcoin deposit.

Mitigating OFAC Penalties

OFAC is more lenient with potential offenders who fall under what it considers mitigating conditions. This can encourage better compliance and lessen the regulatory load on well-meaning companies.

  • Companies that were unaware of the violation

Any company that deliberately engages in illegal acts would of course be subject to higher fines and stiffer penalties. Also, sanctions are likely to be higher for companies that attempt to cover up any illegal transactions. Companies that are able to prove ignorance of the illegal transactions may face lighter punishment

  • Companies that aren’t commercially sophisticated

When deciding what punishment to impose on a company, OFAC looks at several factors including how long the company has been in operation, whether it is bankrupt or solvent, the number of transactions, and any sanctions history. A newcomer with low transaction volumes would likely receive lighter penalties than a long-established financial institution with billions in questionable dealings.

  • Collaboration with OFAC

OFAC is more likely to take a lenient stance toward companies that voluntarily report violations than it is toward companies with violations uncovered independently by OFAC.

Companies can take these mitigating factors into consideration when dealing with OFAC requirements by building a risk-based compliance program appropriate for the size of the organization, and self-reporting when a breach is discovered.

The Bottom Line

Given the growing importance of virtual money in the global economy and the implications of non-compliance with sanctions, participants in the cryptocurrency markets should pay close attention to the regulatory environment going forward.

State and Federal crypto enforcement has accelerated more quickly after President Biden’s Cryptocurrency Executive Order in September 2022. This development suggests that cryptocurrency organizations should prepare for a storm of regulations in the years ahead.

Ransomware Attacks

Ransomware is malware (malicious software) that utilizes encryption to hold a victim’s data ransom. Important data is encrypted to block the owner’s access to files, databases, or software. To gain access, a ransom is then demanded. The most dangerous aspect of ransomware is how rapidly it can spread across a network and affect all of an organization’s databases and servers.

Cybercriminals make billions of dollars from ransomware, and businesses and governments pay a high cost in ransom, expenses and lost data.

Recent Ransomware Attacks

Companies like the Colonial Pipeline, Steamship Authority of Massachusetts, JBS (the world’s largest meatpacker), and the Metropolitan Police Department of Washington, DC were attacked in 2021. The ransom payments to the hackers caused the shutdown of critical infrastructure and subsequent deficiencies, enhanced costs of goods/services, the shutdown of operations and financial losses.

Attacks on the healthcare sector

In 2020, ransomware attacks cost the economy $20 billion in impacted revenue, lawsuits, and ransom paid, according to a new report. A total of 92 ransomware attacks hit more than 600 healthcare facilities in 2020.

Colonial Pipeline Attack

In April 2021, due to the pipeline’s critical role in the national infrastructure system, this attack had a significant impact on the US. Major disruption in gas supplies caused an uproar on America’s east coast after system failures halted the flow of gas.

Brenntag Attack  

Brenntag,  a chemical marketing firm, was targeted by DarkSide in May 2021. The hackers stole 150GB of data, for which Brenntag paid $4.4 million (of the $7.5 million demanded).

Quanta Attack

In April 2021, the REvil gang demanded a $50 million ransom from computer manufacturer Quanta. Apple product blueprints obtained from Quanta were leaked, and the hackers threatened to expose more sensitive information and files.

Acer Attack

The REvil hacker group, which also targeted Travelex, a London-based foreign exchange firm, attacked Acer in May 2021. To date, the $50 million ransom is the largest ever recorded.

CNA Attack

A ransomware attack on a large insurance firm occurred in March 2021. The hacker group targeted CNA’s network, encrypting 15,000 devices, many of which belonged to remote workers.

Rockets Attack

In April 2021, the hacker group Babuk was alleged to have compromised 500GB of private documents about the Houston Rockets from the National Basketball Association (NBA).

AXA Attack.

The Avaddon gang struck European insurance company AXA in May, shortly after major alterations to their insurance policy were made public.

How to Avoid Ransomware Attacks

Be prepared to lessen the chances of an attack. Ensure you have anti-ransomware software installed on all of your computers. If a link is not safe, do not click on it.

As a result of malicious websites, software downloads, and spam mail, ransomware infections can spread. To avoid phishing, do not give out personal information. Never open an attachment from an unknown email. Keep your software and operating system current.

Not only should you avoid downloading files from untrusted sources, but avoid using USB drives. When using public WiFi networks, be cautious. Use only a VPN.

What to Do When You Are Attacked?

To begin, never pay a ransom to decrypt your files when you have no way to be sure you’ll get them back. Your Wi-Fi should be turned off and the network disconnected.  Investigate the attack online using a different device to find out the type of ransomware and any other info displayed on your screen. Take a picture as a record. Consult an expert about your system and notify the appropriate authorities about the attack. And to protect others from the attack, please report it to Bitcoin Who’s Who here: Report Bitcoin Ransomware

The Future of Bitcoin KYC

The addition of two Iranian SamSam ransomware bitcoin addresses to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) list ushered in a new era in Know Your Customer, Counter Terrorist Financing and Anti-Money Laundering (KYC/CTF/AML) regulation compliance for bitcoin transactions. From now on, no one is allowed to transact with these two bitcoin addresses:


It’s a significant first. For responsible crypto exchanges and bitcoin ATMs operating in this wild west legal environment there are very few FREE KYC/CTF/AML compliance tools available. BitcoinWhosWho.com provides open-source data necessary to adhere to burgeoning global KYC/CTF/AML procedures involving bitcoin transactions.

  • Monitor OFAC List
    Prevent scam addresses from registering at an exchange.
  • Bitcoin Transaction Profiling
    Warn customers before they send bitcoin to an accused scammer.
  • Wallet Risk Assessment
    Mark wallets which have transacted with “scam” wallets to a higher degree of risk.

Continue reading The Future of Bitcoin KYC

Bitcoin Ransomware Addresses

List of Bitcoin Ransomware Addresses

Ransomware Name Bitcoin Address
CryptoLocker 4.0 15sJ3pT7J6zefRs95SEsfBZMz8jAw1zAbh
CryptoLocker 1HrEqMHQVWhKuCg7a3rxo2tAFAiKquJ5iP
CryptoLocker 1EJbVfn5hXQ9JcfRyn965UKpNX4qxRW7pY
CryptoLocker 14bgivtRtTjzwiS4rRECoKGXkSZbf1Co39
CryptoTorLocker2015 1KpP1YGGxPHKTLgET82JBngcsBuifp3noW
DMALocker 1382JAg5xbQv7QNwq1svDeyw6ELtNCmujG
Bucbi 1MfVk1utxgvGjMFV3K3CzXsDRDZznj5tey
CryptoHost 18AVPLKGBamXtGpdT3kP2b5Dv3iBUDpjKv
7ev3n 1Lud76Q98VRHCUiyK7XUs7AgFofrqXeP78
TeslaCrypt 15Y2TmHrxjmRFxfNUttwb9aU4DifvDpWKM
TeslaCrypt 1NRn15kJnVRrptTSQJJnMD9KJcWkVFh1Gv
ThunderCrypt 14dqhE6XPoxkkttwwh7qTWmmSwXerWd2Ho
ThunderCrypt 18yfx86BwNK5xYKw71uaHwAxPgCGRJaqgg
ThunderCrypt 1HFY12o56xbHer3oeNxC99A7SGyXaR64hs
Trump Locker 1N82pq3XovKoJYqUmTrRiXftpNHZyu4jyv
Buddy 1AoNMLZfhw7cbMCKAhaKHiveMdwFyVUGeA
Chimera 1JHxr5sbXDoZuDsx624TmZ2MWyDdD9ag8K
CTB Locker 1Hf2vPmYNxzFYWiaURs75h8JoyCczLXCG2
CTB Locker 1E4jsfwFsKVaAVFNfrmGVgDY1HRU8qf7PV
Jigsaw 15fbyNgDnqYQR5vSHJ8PTAEJbKy4dwNBCZ

Bitcoin Ransomware Links

Evolution of Encrypting Ransomware

Ransomeware Notes

WannaCry Ransomware Extorts 39 Payments Worth 6.49 BTC – DAY 1

WannaCry Ransom Note
UPDATE: WannaCry Ransomware Attack up to 14.08007493 BTC on 92 payments as of 11:30am ET May 13. Balances more than doubled in 12 hours.

Today’s widely reported WannaCry ransomware attack is extensive, growing and has already yielded ~USD$12k in profits according to a quick analysis of the BTC addresses involved. On May 12 the 3 bitcoin addresses known to be receiving extortion payments show receipt of 6.49372428 BTC in 39 separate transactions with ransom varying between .15 to .30 BTC each. None of the balances have been moved to new bitcoin addresses since receipt.

The WannaCry Ransomware Bitcoin Addresses Continue reading WannaCry Ransomware Extorts 39 Payments Worth 6.49 BTC – DAY 1

Bitcoin Ransomware Attacks

This is a list of bitcoin ransomware attacks which I will be updating periodically as more become public.

Last Updated 11-June-2016

Date BTC Amount Paid (USD) Target City Country Virus Name Source
6/29/2016 500 Sports Team USA vocativ.com
6/7/2016 20,000 University Calgary, OT CA cbc.ca
4/25/2016 NA Utility Lansing, MI USA theregister.co.uk
4/1/2016 750 Fire Department Snoqualmie, WA USA CryptoLocker “Locky” eastofseattle.news
3/1/2016 Pending (4 BTC) Hospital Henderson, KY USA CryptoLocker “Locky” livebitcoinnews.com
3/1/2016 Pending Hospital Baltimore, MD USA Samsam aka MSIL or Samas baltimoresun.com
2/1/2016 17000 Hospital Los Angeles, CA USA CryptoLocker “Locky” wired.com
2/1/2016 450 Police Station Melrose, MA USA   ibtimes.co.uk
12/10/2015 500 Retail Store Calgary, OT CA cbc.ca
10/1/2015 572 Sheriff Office Dickson County, TN USA   bostonglobe.com
4/1/2015 500 Police Station Tewksbury, MA USA KEYHolder bostonglobe.com
1/1/2015 500 Police Station Midlothian, IL USA   bostonglobe.com
11/1/2013 750 Police Station Swansea, MA USA CryptoLocker “Locky” bostonglobe.com

From pymnts.com

In 2015, the FBI received roughly 2,453 complaints related to ransomware malware attacks, which amounted to $24.1 million in losses for victims

Related from The Merkle 11-June-2016
Cisco Ransomware Tool Can Now Decrypt All Versions of TeslaCrypt