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The U.S. Department of the Treasury, through OFAC, has sanctioned the Russian company Operation Zero and its founder Sergey Zelenyuk for involvement in the theft of proprietary software from a U.S. defense contractor.

The operation was funded via millions in cryptocurrency paid to an Australian national who has pleaded guilty. This marks the first application of the Protecting American Intellectual Property Act of 2023.

The sanctions aim to disrupt financial incentives for corporate espionage and trade secret theft. U.S. authorities are likely to impose further sanctions on linked cryptocurrency wallets and advise financial institutions to strengthen compliance measures.