Chainalysis Report: Over $400 Million Worth Of Crypto Ransomware Proceeds Linked To Russia

Bulk of Ransomware Payments Linked to Russia

In a blog post published on Monday (February 14, 2022), Chainalysis highlighted the level of ransomware and money laundering activities happening in Russia. According to the report, groups and individuals based in Russia were allegedly responsible for the largest share of different crypto-based crimes.

Chainalysis stated that of the $400 million connected to ransomware payments in 2021, about 74% were “highly likely to be affiliated with Russia in some way.”

With the help of Web traffic and blockchain analysis data, the firm discovered that the illicit funds from ransomware attacks were laundered via services catering to Russian users. Out of the 74%, the Cybercriminal group Evil Corp was responsible for nearly 10%.

Meanwhile, the blockchain intelligence outfit connected ransomware payments to cybercriminals in Russia based on three indicators”

  • One was avoidance of entities in the Commonwealth of Independent States (CIS). (The CIS is an intergovernmental organization of Russian-speaking countries formed after the dissolution of the Soviet Union.)
  • The second was whether or not the company is linked to Evil Corp.
  • The third criterion: the location and the use of the Russian language for document-sharing and announcements.

Money-laundering activities were also prominent in Moscow, with the blog post reporting that several cryptocurrency businesses operating in the region funneled large sums of dirty money. According to Chainalysis, between 2019 and 2021, these businesses received illicit funds on a quarterly schedule. These quarterly payments peaked at nearly $1.2 billion in Q2 2021.

Kremlin Cranks up the Heat Against Organized Darknet Crime

Russian authorities have been taking the fight to these alleged criminal groups, especially on the dark web. These efforts have led to sweeping busts and arrests of persons linked with cybercrime offenses.

In January 2022, Russian law enforcement arrested fourteen suspected affiliates of the REvil ransomware group, which marked the first action of its kind by the authorities.

The Chainalysis report also highlighted businesses involved in the crypto ransomware operations, including some tied to international incidents. Some of the businesses highlighted by Chainalysis that have facilitated money-laundering include Eggchange, Buy Bitcoin, Garantex, Suex, Tetchange, Bitzlato, and Cashbank.

Back in September 2021, United States authorities hit Suex with designation sanctions for allegedly laundering funds for ransomware attackers. The U.S. also seized $2.3 million in Bitcoin paid to the notorious cybercriminal group DarkSide, following a ransomware attack on Colonial Pipeline, the largest pipeline system in the United States.

Apart from ransomware, the Chainalysis report also included payments tied to scams and darknet vendors that totalled $313 million and $296 million respectively.

As part of the cybercrime crackdown, authorities are also going after carding websites–platforms that sell stolen credit cards in exchange for cryptocurrencies.

The fight against crypto ransomware is also coming at a time when Russian officials disagree about the best way to deal with cryptocurrencies. Russia’s central bank favors a blanket crypto ban while the country’s Finance Ministry has advocated for the creation of a regulatory framework.

Regardless of how the Russian government and Russian financial institutions choose to deal with cryptocurrency, the problem of Russian-sponsored ransomware attacks remains a clear and present danger.

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