The Suex Exchange Sanction Scandal Continues to Heat Up

On September 21st, the U.S government took action against Suex, a Russian cryptocurrency broker. According to the announcement, the sanctions on Suex should eliminate criminal-related activities. Furthermore, the directive came from the Treasury’s Office of Foreign Assets Control (OFAC).

The War on Illicit Financing

According to the Treasury’s announcement, criminal networks use cryptocurrencies and exchanges to launder money. As per the government, such incidents affect the country’s economy. Essentially, Suex’s services combine illegal ransomware transactions with genuine transfers. So, for example, criminal organizations would clean their crypto-ransomware amounts before cashing them out as fiat currencies.

Recent allegations show that the Russian exchange doesn’t have any physical offices. However, it has a legal registration in the Czech Republic. Also, the platform’s formal address reveals that the building hosts antique shops and a law firm. And, according to Chainalysis, Suex’s actual location is at the Federation Tower East Building in Moscow. Lastly, no one has access to the building without an invitation.

The Federation Tower management says that Suex isn’t part of the building’s address. Instead, the address is under a company that the exchange’s top executive runs. However, Suex’s CEO denies the accusations that his platform facilitates ransomware transfers. Also, the executive plans on defending his name and distances his affairs from the charges.

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Another claim places Maxim Kurbangaleev, Suex’s co-founder, in the sanction’s spotlight. In the past, Maxim allegedly guided users on how to trade without submitting any information. Usually, platforms require users to undergo KYC checks to verify their identities. Thus, TRM Labs admits that skipping such procedures violates the compliance laws put in place.

Suex’s Past Criminal Activity

OFAC received investigative support from Chainalysis, which monitors transactions taking place in the crypto space. Also, Chainalysis says that Suex processed transactions worth billions for the last three years. Furthermore, most of the transfers came from illegal high-risk sources. In total, the crypto broker handled Bitcoin transactions worth $160M, converting the unlawful money into fiat.

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All crypto conversions took place across various branches in St. Petersburg and Moscow. Also, a separate report from Elliptic shows a similar transaction pattern. Lastly, according to Elliptic’s findings, more than 20 addresses received crypto assets worth $934M.