- FinCEN, the US Treasury Department’s Anti-Money Laundering Office, found that the number of ransomware in 2021 is expected to exceed the record in 2020.
- However, there are some problems with FinCEN’s data presentation, which may exaggerate the amount paid by ransomware.
- It is likely that what is happening is an improvement in filing compliance.
The US anti-money laundering regulator released a new report on the surge in ransomware payment activities in 2021. But is this a surge in ransomware, or a surge in reports related to ransomware?
The US Financial Crime Enforcement Network (FinCEN) released the ransomware report for the first half of 2021 on October 15. According to the report, there has been a surge in reports of ransomware activity this year:
“The total value of ransomware-related suspicious activity reports (SARs) reported in the first six months of 2021 was US$590 million, exceeding the total value of reports for the full year of 2020 (US$416 million).”
FinCEN is the office of the Ministry of Finance responsible for implementing the Bank Secrecy Act and other anti-money laundering laws. One of the regulations is that financial institutions operating in the United States must submit SARs if they encounter suspicious activities.
FinCEN’s data comes from its SARs database. However, the details are tricky. As the office explained:
“The complete data set includes 635 SARs reported suspicious activities worth 590 million U.S. dollars. Of the 635 SARs submitted during the review period, 458 reported actual transactions that occurred during the review period, worth 398 million yuan. The remaining 177 SARs reported suspicious activities. The transaction occurred before January 1, 2021.”
Although the amount of ransomware payments in 2021 seems to exceed 2020, the speed of change is not as significant as in the SAR filing. Intuitively, this difference is as follows:
If you look at the actual date of the attack rather than the file submitted, FinCEN’s data shows that the amount involved in the ransomware incident was US$398 million, not US$590 million. This may indicate an improvement in filing compliance, but it may also be the result of a general lag in identifying cryptocurrency addresses related to ransomware attacks.
Another potential problem with the report is that FinCEN requires SARs reports from multiple financial operators, which may operate along a single ransomware payment chain, which may result in double counting.
In the trend, FinCEN found that ransomware participants are increasingly demanding what the payment office calls “anonymity-enhanced cryptocurrency.” In this industry, these cryptocurrencies are often referred to as “privacy coins”. The most famous privacy coin, Monero (XMR), has received special attention. As we all know, XMR payment data is difficult to obtain and unreliable.
However, as previously pointed out by relevant authorities , FinCEN stated that the main means of ransomware redemption is not complex technology, but a centralized cryptocurrency exchange operating in a jurisdiction that does not have supervision or does not require KYC.
Earlier this year, the high-profile ransomware attack targeting US infrastructure made the region a top priority on the White House’s national security agenda. Earlier this week, the Biden administration convened a meeting of 32 countries to discuss regulations to prevent future catastrophic attacks.
In September of this year, the U.S. Treasury Department sanctioned a cryptocurrency exchange for the first time. According to CNBC, the Office of Overseas Assets Control (OFAC) of the U.S. Department of the Treasury announced that it will sanction the cryptocurrency exchange Suex and add it to the Special Designated Nationals (SDN) list because it is suspected of laundering money for cyber attacks. This is the first such action against a virtual currency exchange. Previously, a series of cyber attacks severely damaged some industries and even threatened US government agencies. The U.S. Treasury Department stated that in 2020 alone, the total payment for extortion attacks will exceed $400 million, more than four times the amount in 2019. OFAC alleges that Suex facilitated illegal revenue transactions involving at least eight ransomware variants. The department also claimed that more than 40% of the company’s known transaction history was “related to illegal actors.”
It is worth mentioning that on October 15, the U.S. Treasury Department issued sanctions compliance guidelines for the virtual currency industry. The U.S. Treasury Department recommends that virtual currency exchanges use geolocation tools to prevent countries sanctioned by the United States from accessing their websites. The encryption industry is playing an increasingly important role in preventing virtual currencies from being used to evade sanctions. The crypto industry has a responsibility to ensure that they do not directly or indirectly participate in sanctions transactions prohibited by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/fincen-report-the-number-of-ransomware-in-2021-is-expected-to-break-the-2020-record/
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