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U.S. Treasury sanctions Operation Zero over stolen cyber tools

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U.S. Treasury sanctions Operation Zero over stolen cyber tools

The U.S. Department of the Treasury has sanctioned a Russia-based cyber “exploit broker” and its affiliates in a high-profile national security action targeting the theft and sale of proprietary U.S. government cyber tools, officials announced Tuesday.

Summary

  • The U.S. Treasury sanctioned Russian exploit broker Operation Zero and associates for trafficking stolen U.S. cyber tools, using the Protecting American Intellectual Property Act.
  • The action adds individuals and entities to the SDN list, blocking their U.S. assets and barring U.S. persons from dealings with them.
  • The sanctions coincide with a DOJ and FBI investigation into a former defense contractor employee who sold proprietary cyber tools for cryptocurrency

Operation Zero blacklisted by U.S.

The designation marks the first use of the Protecting American Intellectual Property Act (PAIPA) in a sanctions case aimed at combatting digital trade-secret theft.

The Treasury’s Office of Foreign Assets Control (OFAC) placed Russian national Sergey Sergeyevich Zelenyuk and his St. Petersburg-based company Matrix LLC, also known as Operation Zero, on the Specially Designated Nationals (SDN) list, along with five associated individuals and entities.

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The sanctions target the acquisition and redistribution of “exploits,” specialized computer code that can be used to take advantage of vulnerabilities in widely used software.

According to the Treasury, at least eight U.S. government cyber tools developed for defense and intelligence use were stolen from a U.S. company and allegedly sold by Operation Zero to unauthorized actors.

In its announcement, the Treasury said that Zelenyuk and his network offered substantial bounties to obtain exploits and then monetized the tech with buyers in Russia and elsewhere. Federal officials have expressed concern that such tools could be used for criminal activity or espionage, including ransomware and other destabilizing cyber operations.

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The sanctions also encompass individuals linked to the group’s operations, including an affiliate company based in the United Arab Emirates and suspected members of the Trickbot cybercrime gang, previously sanctioned in other actions.

Under U.S. sanctions law, the property and interests of SDN-designated persons within U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

The action works in tandem with an ongoing criminal investigation by the Department of Justice and FBI into a former U.S. defense contractor employee who pleaded guilty last year to stealing the cyber tools and selling them for cryptocurrency.

Treasury officials said the sanctions aim to deter future theft of American intellectual property that could threaten national security, underscoring Washington’s broader strategy to hold foreign cyber actors accountable through economic and financial tools.

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Crypto World

Investors Don’t Hear Wall Street’s Crypto Chatter: Bitwise

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26 February 2026

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Traditional investors don’t yet realize the impact crypto may have on financial markets, meaning there could be an opportunity to invest in what the technology could eventually become, says Bitwise investment chief Matt Hougan.

“Everywhere I look, Wall Street is screaming that finance is moving on-chain. Not a little of it; all of it,” Hougan said in a note on Tuesday. “Yet traditional investors can’t hear it.”

He argued investors are suffering from “anchoring bias” and are still fixated on how crypto was perceived in its early days — when it was still an unknown technology mostly used by cypherpunks and dark web black markets.

“They look at crypto and still see a punk skateboarder with tattoos. They don’t realize he’s shaved, put on a suit, and is deploying infrastructure that will underpin the next generation of capital markets,” Hougan said.

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Major finance companies have launched or are experimenting with facets of crypto technology, mainly tokenization and stablecoins, spurred on by US regulators and lawmakers moving to support the sector.

Crypto investors not registering the shift

Hougan said that crypto investors are also not taking notice of the current shift, as traditional institutions have taken a passing interest in the space before.

“They’re suffering from ‘the boy who cried wolf’ syndrome,” he said. “They’ve heard the promises of institutional adoption for so long that they no longer register.”

Hougan argued, however, that major finance players have begun to move on-chain with the backing of regulators, namely the Securities and Exchange Commission’s “Project Crypto,” launched in July to “enable America’s financial markets to move on-chain,” according to its chair, Paul Atkins.

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The value of tokenized assets on blockchains, such as US Treasurys and commodities, has quickly begun to approach $20 billion, he said, more than quadrupling over 2025.

Bitwise’s Matt Hougan said the chart showing the value of tokenized assets on-chain was “steeper than Everest.” Source: Bitwise

“The numbers in question are enormous,” he said, adding that the hundreds of trillions of dollars floating around in exchange-traded funds, stocks and bonds means the tokenization market “can grow 10,000x and still have room to grow.”

Related: Tokenization without provenance is complicity

Hougan added that BlackRock and credit manager Apollo have launched tokenized funds on-chain worth billions of dollars, and major banks JPMorgan, Bank of America, Citigroup, and Wells Fargo are in talks for a stablecoin.