U.S. imposes sanctions on Russian darknet market and crypto exchange

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WASHINGTON, April 5 (Reuters) - The U.S. Treasury Department imposed sanctions on Tuesday on a prominent Russia-based darknet market site and a cryptocurrency exchange that it said operates primarily out of Moscow and St. Petersburg.

The sanctions against Hydra and currency exchange Garantex, published on the Treasury Department's website, "send a message today to criminals that you cannot hide on the darknet or their forums," Treasury Secretary Janet Yellen said.

According to blockchain researchers, approximately 86% of illicit bitcoin received directly by Russian crypto exchanges in 2019 came from Hydra, which the Treasury Department described as the world's "largest and most prominent darknet market."

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The new sanctions prohibit U.S. persons from making or receiving "any contribution or provision of funds, goods, or services" to Hydra or Garantex, the Treasury said.

The department said the sanctions, which prohibit U.S. transactions with Hydra and Garantex and seek to freeze any assets they may have under U.S. jurisdiction, is part of an international effort to disrupt proliferation of malicious cybercrime services, drugs and other illegal offerings, including ransomware activity, that emanate from Russia.

Treasury joined with the U.S. Department of Justice, the FBI, and the German Federal Criminal Police, which said it shut down Hydra servers in Germany and seized $25 million worth of bitcoin.

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Reporting by Rami Ayyub and David Lawder; Editing by Leslie Adler and Marguerita Choy

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