The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Iran-based Behrouz Parsarad, the sole administrator of Nemesis, an online darknet marketplace, which was subject of an international law enforcement operation and “was taken down in 2024.”
Prior to its takedown by law enforcement, narcotics traffickers and cybercriminals openly “traded in illegal drugs and services on Nemesis, which was designed with built-in money laundering features.”
Nemesis reportedly had more than 30,000 active users and 1,000 vendors and facilitated the sale of nearly “$30 million worth of drugs around the world between 2021 and 2024, including to the United States.”
The sanctions designation is OFAC’s first action as “a member of the Federal Bureau of Investigation (FBI)-led interagency Joint Criminal Opioid and Darknet Enforcement (JCODE) Team.”
The action, taken pursuant to Executive Order (E.O.) 14059, which targets proliferators of narcotics and their “means of production, underscores the United States’ commitment to combatting all means of supplying narcotics to the United States.”
Treasury remains focused on the risks posed by darknet marketplaces, as highlighted in previous “designations of Genesis Market on April 5, 2023, and of Hydra Market on April 5, 2022.”
According to the Financial Crimes Enforcement Network’s (FinCEN) supplemental advisory published on June 20, 2024, criminal organizations use darknet marketplaces “to sell precursor chemicals and manufacturing equipment used for the synthesis of fentanyl and other synthetic opioids, as well as to traffic fentanyl and other narcotics into the United States.”
Nemesis was established in 2021 and operated as “a criminal marketplace on the darknet, an encrypted network within the Internet that can only be accessed with special anonymity-enhancing browsers.”
Drug traffickers active on Nemesis allegedly sold fentanyl around the world, “both on its own and surreptitiously laced into other drugs.”
In addition to offering narcotics for sale, Nemesis facilitated the sale of a wide variety of other goods and services such as “false identification documents and professional hacking services that enabled buyers to hire hackers to illegally seize control of the online accounts and communications of selected victims.”
Behrouz Parsarad, residing in Iran, was the sole administrator of Nemesis.
In this capacity, Parsarad established Nemesis and “held full control over the marketplace and its virtual currency wallets.”
Parsarad enriched himself from fees he charged users of Nemesis with every transaction, pocketing what OFAC estimates to “be millions of dollars over the course of the marketplace’s existence.”
In addition to providing criminals with a platform to conduct transactions, Parsarad laundered virtual currencies for “narcotics traffickers and cybercriminals active on Nemesis.”
On March 20, 2024, U.S., German, and Lithuanian law enforcement agencies seized Nemesis’ servers in “a joint operation.”
Since the takedown of Nemesis, Parsarad has discussed setting up a new darknet marketplace to “take the place of Nemesis with vendors that were once active on the marketplace.”
OFAC’s designation of Parsarad was the “result of strong partnership and coordination with the FBI, the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, FinCEN, and a range of European law enforcement partners.”
OFAC designated Parsarad pursuant to E.O. 14059 for having engaged in, or attempted to “engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of narcotics or their means of production.”
In addition to sanctioning Parsarad, OFAC is identifying “49 virtual currency addresses used by Parsarad.”
As a result of the action, all property and interests in property of the blocked person described above that “are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.”
In addition, any entities that are owned, “directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.”
Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally “prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.”
Non-U.S. persons are also prohibited from “causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.”
In addition, FIs and other persons that engage in certain transactions or activities with the “sanctioned individual may expose themselves to sanctions or be subject to an enforcement action.”
The prohibitions include the making of any “contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.”
Violations of OFAC regulations may result in “civil or criminal penalties. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.”
The power and integrity of OFAC sanctions derive “not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law.”
The ultimate goal of sanctions is “not to punish, but to bring about a positive change in behavior.”