US sanctions Russia accused of laundering virtual currency for ransomware subsidiary

The Treasury Department on Friday sanctioned a Russian woman accused of laundering virtual currency on behalf of the country’s elites and cybercriminals, including a subsidiary of the Ryuk ransomware.

According to the Office of Foreign Assets Control, Ekaterina Zhdanova helped other Russians evade sanctions imposed on the country’s financial system after the invasion of Ukraine. In one case, an anonymous oligarch contacted Zhdanova to transfer $100 million to the United Arab Emirates, OFAC said.

In 2021, she allegedly laundered more than $2.3 million in “suspected victim payments” for a Ryuk ransomware subsidiary. She managed the funds through cryptocurrency exchange Garantex, which itself was designated by OFAC in 2022.

According to OFAC, more than $100 million in transactions associated with darknet markets and criminals were made on the exchange before it was sanctioned.

“Thanks to key enablers like Zhdanova, Russian elites, ransomware groups, and other illicit actors have sought to evade U.S. and international sanctions, including through the abuse of virtual currency. » said Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson. The OFAC announcement does not provide details on Zhdanova’s professional background.

Ryuk ransomware wreaked havoc for years after it emerged in 2018. In 2020, amid Covid-19 lockdowns, federal law enforcement warned that the healthcare industry was at risk. under Ryuk’s attack. The preceding month, hospital chain Universal health services had been hit by a Ryuk attack that ultimately cost the company $67 million.

In February, a Russian pleaded guilty in federal court in Oregon for laundering funds intended for Ryuk over a three-year period. He was accused of being a middleman for the group alongside 13 unnamed co-conspirators.

Sanctions against individuals like Zhdanova are often more symbolic than impactful, because Russians involved in illicit activities are unlikely to have assets or business interests in the United States.

James Reddick

James Reddick has worked as a journalist around the world, including in Lebanon and Cambodia, where he was deputy editor of the Phnom Penh Post. He is also a radio and podcast producer for outlets like Snap Judgment.