Ex-Canadian Government Employee in Ransomware Caper

Key Insights:

• Ex-Canadian lawmaker extradited to the US for ransomware crimes.
• Law enforcement seized 719 Bitcoin and CAD 790,000 in fiat.
• The US Justice Department will set an example if the ex-lawmaker is found guilty.

The Canadian government and cryptos have garnered plenty of media attention recently. February proved to be a challenging month for Canadian Prime Minister Justin Trudeau. The Freedom Convoy 2022 led to the Prime Minister’s flight to safety.

For the crypto market, Trudeau also invoked a state of emergency. Far-reaching laws under a national state of emergency allow the government to freeze personal bank accounts without court orders.

A wave of bank withdrawals and crypto purchases led to attempts to freeze crypto accounts and wallets. Exchanges were less forthcoming, however.

With illicit activity on the rise early in the year and the Freedom Convoy 2022 grabbing plenty of media attention, news of a Canadian ex-lawmaker involved in a ransomware caper caught the headlines.

US DOJ Extradites Ex-Canadian Lawmaker

On Thursday, the Department of Justice (DoJ) announced the extradition of a former Canadian government employee to the U.S on charges of ransomware attacks. The attacks allegedly resulted in payments of tens of millions of dollars in ransoms.

The indictment charged Sebastien Vachon-Desjardins with a laundry list of offenses, including computer fraud, wire fraud, and participation in ransomware known as NetWalker.

NetWalker has reportedly targeted companies, municipalities, hospitals, law enforcement, emergency services, school districts, colleges, and universities worldwide.

According to the DoJ, attacks also targeted the healthcare sector during the pandemic, extorting victims amidst a global economic crisis.

During the arrest of Vachon-Desjardins, law enforcement officers reportedly seized 719 Bitcoin (BTC) and CAD 790,000 in fiat.

Ransomware has become a big concern for governments. It is of far greater concern when considering the countries with the largest hauls.

Russia Leads Ransomware Ill-gotten Gains

Last month, FXEmpire reported on ransomware figures for 2021 and the possible use of ransoms to fund illegal activities, including terrorism.

In 2021, Russian entities led the way on the ransomware table, with Conti amassing $180m from ransomware victims. DarkSide, another Russian entity, came second with just under $100m. These numbers are conservative estimates, however.

In 2021, Chainalysis estimates that ransomware payments hit $602m. Based on 2020 revisions, the number would be almost double the estimate and well above the $1bn mark.

With North Korea also particularly active in the crypto space, governments have raised concerns over Russia’s ability to circumvent sanctions via the crypto market.

It remains to be seen whether Russia has a big enough haul to offset Russia’s lack of access to funds by legitimate means.

Whale Alert today identified three crypto withdrawals, totaling 30,000 BTC, from Coinbase. A total amount, equivalent to approximately $1.17bn, was sent to anonymous wallets.

With Bitcoin edging its way back towards $40,000, some form of investigation could be next, though governments would be hard-pushed to gain access to unknown crypto wallets.

When considering Russia’s invasion of Ukraine and government intentions to stamp out illicit activity, ex-Canadian lawmaker Vachon-Desjardins could be in for a tough time should the charges stick.