Treasury officials offer additional commentary on their first crypto exchange action and advisory in an exclusive interview with TRM Labs.  

U.S. Treasury's Office of Foreign Assets Control (OFAC) took its first-ever action against a cryptocurrency exchange, SUEX.io, a concierge cryptocurrency exchanger incorporated in Czechia but operating in Russia. This action comes as the United States attempts to tackle the scourge of ransomware attacks and harden cyber defenses against cybercriminals and rogue nation-state actors.   

In the view of Treasury, SUEX fills an essential niche in the ecosystem of under-regulated exchanges that, either through willful ignorance or witting cooperation, facilitate the conversion of illicit crypto ransoms into real-world currency.  

SUEX also operated as a so-called "nested" or "parasite" exchange, meaning SUEX did not directly custody of its clients' crypto. Instead, it fed off the infrastructure of a large, global cryptocurrency exchange to conduct its transactions. Nested exchanges often take advantage of the greater liquidity and lower transaction costs of big, multinational exchanges while presenting customers with a custom-made interface obscuring the connection to the larger service. Using this relationship with a large exchange, and access to cash from unknown sources, SUEX was able to convert the illicit monies of its clients to physical cash at an alarming scale. 

See TRM's deep-dive investigation on Suex here: https://www.trmlabs.com/post/behind-suex-io-the-first-sanctioned-cryptocurrency-exchange 

Todd Conklin, Counselor to the Deputy Secretary of the Treasury, highlighted the risk associated with nested exchanges when discussing the action with us this morning in a special edition of TRM Talks. 

Read more about the advisory here: https://www.trmlabs.com/post/ofac-takes-first-action-against-cryptocurrency-exchange-and-issues-updated-ransomware-advisory 

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Learn more about our mission to build a safer financial system for billions of people here: https://www.trmlabs.com/about