Ransomware Hacker Pleads Guilty After $15M Bitcoin Extortion Scheme

More than $15 million in Bitcoin flowed from U.S. victims during a Ryuk ransomware campaign tied to Karen Serobovich Vardanyan, federal prosecutors alleged. The 34-year-old Armenian national, extradited from Ukraine, pleaded guilty July 8 to conspiracy and computer fraud after admitting his involvement in cyberattacks conducted from November 2019 through April 2020.

Victims encountered encrypted files, disabled workstations, and inaccessible corporate data after intruders penetrated their networks. The group spread Ryuk across hundreds of servers and computers, then used the resulting disruption to pressure organizations into purchasing decryption tools with cryptocurrency.

Federal prosecutors explained in a press release on July 9: “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.”

Corporate targets included a Michigan business that surrendered 200 Bitcoin to regain control of its network. The payment exceeded $1.1 million when completed. Other incidents involved a technology company in Wilsonville, Oregon, and a Texas school attacked in February 2020.

Cryptocurrency proceeds attributed to the operation totaled approximately 1,610 Bitcoin, carrying a value above $15 million at the time of the transactions. Grand jurors in Portland indicted Vardanyan on Feb. 22, 2024, on conspiracy, computer fraud, and extortion counts. His plea resolved the conspiracy and computer fraud charges, and the agreement requires him to provide more than $1.1 million in restitution.

Vardanyan faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release for conspiracy, and a maximum of 10 years in prison, a $250,000 fine, and three years of supervised release for computer fraud. He will be sentenced on Sept. 22, 2026, by a U.S. district court judge.

Source: https://news.bitcoin.com/ransomware-hacker-pleads-guilty-after-15m-bitcoin-extortion-scheme/