State Department designates broker, affiliates under PAIPA for trade secret theft

The U.S. State Department announced designations of one individual and two entities under the Protecting American Intellectual Property Act (PAIPA) in connection with theft of trade secrets from U.S. persons.

The department identified Matrix LLC, also known as Operation Zero, as a Russia-based cyber-tools broker that publicly advertises itself as a reseller of cyber exploits to various customers, including the Russian government.

According to the State Department, from 2022 to 2025 Peter Williams, an Australian national, stole eight trade secret “zero-day exploits” from his employer, described as a U.S. defense contractor. The department said the components were meant to be sold exclusively to the U.S. government and select allies, and that Williams sold the exploits to Operation Zero in exchange for $1.3 million in cryptocurrency payments.

The State Department also identified Sergey Sergeyevich Zelenyuk as a Russian national and the director and sole owner of Operation Zero. The department said Zelenyuk established a UAE-based company, Special Technology Services LLC FZ (STS), anticipating it would conduct business with various countries in Asia and the Middle East.

The State Department said Operation Zero and Zelenyuk are foreign persons that knowingly engaged in, or benefitted from, significant theft of trade secrets of U.S. persons occurring on or after Jan. 5, 2023, and that the theft is reasonably likely to result in, or has materially contributed to, a significant threat to U.S. national security, foreign policy, or economic health or financial stability. The department said STS is owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, Zelenyuk.

Concurrently, the Treasury Department is designating Zelenyuk and his company, Matrix LLC (doing business as Operation Zero), STS, and four associated individuals and entities under Executive Order 13694, as amended by Executive Order 14306.

The State Department said that as a result of the action under Executive Order 13694, as amended, all property and interests in property of those designated that are in the United States or in the possession or control of a U.S. person are blocked. The department said U.S. persons are generally prohibited from conducting business with sanctioned persons, and that persons that engage in certain transactions or activities with those designated may expose themselves to sanctions risk.

The department said sanctions specified in Section 2(b)(1)(A), (D), (H), (I), and (J) of PAIPA apply with respect to Operation Zero and STS, and that individuals designated under PAIPA are subject to sanctions outlined in Section 2(b)(2) of the statute.