Fintech CEO: FBI Crypto Ransomware Seizure Brings Custody to Forefront

The FBI seized a cryptocurrency wallet used by Aleksandr Sikerin, it says, which holds $2.3 million in assets which were tied to ramsomware attacks. Sikerin is associated with REvil, which is known for its ransomware malfeasance. Earlier this month, the Justice Department announced a similar seizure of over $6 million in ransomware payments to Yevgeniy Polyanin, who targeted law enforcement and municipal organizations, among others. It is said that REvil has been responsible for more than $200 million in extortion since 2019.

“While identifying these criminals, and seizing their assets, is a step in the right direction, many of them are resting safely in countries, such as Russia, without extradition treaties with the United States. That’s why it is important that governments ensure that exchanges and other companies working in concert with these bad actors are held accountable,” opined Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges. Earlier this year, Suex was sanctioned for allegedly doing business with hackers.

“There are three kinds of companies in the digital assets space. Those who actively and knowingly provide services, including money laundering, which aid in the efforts of hackers and bad actors. Those who are complicit and provide aid with no direct knowledge, but, instead, because they fail to adequately vet their clients with the AML & KYC procedures which have become industry best practices and, in most jurisdictions, mandatory. Finally, there are those which take every precaution and employ industry leading technologies to thwart hackers at every turn. Those that fall into the latter group, those are the companies with long-term potential, and it is time that the industry recognizes that in a more substantial way,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“This isn’t just an issue with exchanges, of course. Even in the custody space, we’re faced with companies who are following the law but are still leaving massive vulnerabilities in their operation. It isn’t that they are trying to do a lackluster job. It’s just that they don’t appreciate how important the security aspect is in the digital assets space. Blockchain technologies, including digital assets, are a truly transformative innovation. We’re going to see them play out over the next decades. They will completely change how we interact with finance. In order to enhance the opportunities in front of us, it is incumbent upon us to do everything we can to ensure that the technology is safe and secure,” said Gardner.