Bitcoin Ransom Plot Crashes as US Closes in on Ryuk Mastermind
The U.S. Department of Justice (DOJ) announced on July 16 that a ransomware suspect extradited from Ukraine has been charged in the United States after investigators traced over 1,600 BTC to his alleged criminal activity. Karen Serobovich Vardanyan, a 33-year-old Armenian national, was indicted in connection with a widespread cyber extortion campaign involving Ryuk ransomware. The FBI tracked the cryptocurrency as part of an international investigation into the group’s attacks on American companies, including a technology firm in Oregon.
Vardanyan and his co-conspirators are accused of breaching company networks between March 2019 and September 2020, encrypting data and demanding ransom payments to unlock critical systems. “As part of the scheme, ransom payments were extorted from victim companies in exchange for decryption keys to regain access to their data. A ransom note was placed on the computer systems demanding ransom payments in Bitcoin, a form of cryptocurrency, and provided an email address that victims could use to communicate with the cybercriminals,” the DOJ detailed, adding:
Vardanyan and co-conspirators are alleged to have received approximately 1,610 bitcoins in ransom payments from the victim companies, which was valued at over $15 million at the time of payment.
Ryuk ransomware was used to compromise hundreds of devices across various sectors, including public services, healthcare, and critical infrastructure.
The Justice Department’s Office of International Affairs worked closely with Ukrainian authorities to secure Vardanyan’s extradition on June 18. He pleaded not guilty during his initial court appearance in Oregon and remains in custody awaiting trial, which is scheduled to begin on Aug. 26.
Charges include conspiracy, fraud in connection with computers, and extortion involving computer systems. The DOJ noted:
If convicted, Vardanyan faces a maximum sentence of five years in federal prison, three years’ supervised release, and a fine of $250,000 for each count.
The FBI continues to search for three additional defendants, one of whom is awaiting extradition in France, while the others remain fugitives in Ukraine.
