Privacy, What Privacy? - For the First time U.S. Treasury Attributes Bitcoin Addresses to Two Alleged Criminals

Privacy, What Privacy? - For the First time U.S. Treasury Attributes Bitcoin Addresses to Two Alleged Criminals

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has taken action against two Iranian-based individuals for alleged involvement in the Bitcoin (BTC) ransomware scheme called  “SamSam”.

The Treasury released a statement explaining their actions against Ali Khorashadizadeh and Mohammad Ghorbaniyan, citizens of Iran since they allegedly:

“Helped exchange digital currency (bitcoin) ransom payments into Iranian rial on behalf of Iranian malicious cyber actors involved with the SamSam ransomware scheme that targeted over 200 known victims”.

Apparently, around 7,000 transactions in Bitcoin and around 6,000 BTC have been moved since 2013.

The SamSam ransomware attacks are described as cyber activities directed or organized by persons residing outside of the US, and which will likely result in a significant threat to the national interest of the United States.

Treasury notes that the compliance obligations are the same, regardless of whether a transaction is denominated in a digital currency, or traditional fiat currency.

More importantly, this is the first time that Bitcoin digital addresses have been publicly attributed to designated individuals, prompting questions regarding the privacy of digital transactions. One of the key comparative strengths of Bitcoin is the alleged ability to keep users’ identities private.

Further explaining this move, the Treasury notes that:

“Digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses”.

As a result of this decision, all property and interests in property of two Iranians are blocked, and the  U.S. persons are generally prohibited from dealing with them.

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