US Sanctions Crypto Firms Linked to Russia for Sanctions Evasion

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced sanctions on 13 entities and two individuals involved in the financial services and technology sectors of the Russian economy. These entities, including those dealing with virtual assets, are accused of aiding Russian entities in evading US sanctions.

According to the Treasury Department, these designations come after reports of entities facilitating transactions or offering services that helped sanctioned Russian entities evade sanctions. The move follows previous actions by OFAC targeting companies servicing Russia’s financial infrastructure and restricting its access to the global financial system amid the conflict with Ukraine.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson stated that Treasury will continue to expose and disrupt companies aiding sanctioned Russian financial institutions in reconnecting to the global financial system.

Among the sanctioned firms are Moscow-based fintech companies like B-Crypto, Masterchain, Laitkhaus, and Atomaiz, which allegedly collaborated with OFAC-designated Russian banks to facilitate cross-border settlements and issue digital financial assets. Cyprus-based Tokentrust Holdings Ltd., the majority shareholder of Atomaiz, was also designated.

Other entities targeted include technology companies like Veb3 Tekhnologii and Veb3 Integrator, providing blockchain solutions to clients such as Sberbank and Alfa-Bank. Bitpapa, a peer-to-peer virtual currency exchange, and Crypto Explorer, a virtual currency exchange operating in Russia and UAE, were also sanctioned.

In addition to crypto-related sanctions, OFAC-designated companies associated with the OFAC-designated Echelon Union for Science and Technology, a Moscow-based entity licensed by Russian authorities.

As a result of these sanctions, all property and interests in property of the designated persons within US jurisdiction are blocked and must be reported to OFAC. Foreign financial institutions dealing with Russia’s military-industrial base risk facing sanctions as well.

These sanctions aim to disrupt Russia’s ability to use alternative payment mechanisms and financial technology entities to evade US sanctions and continue funding its conflict with Ukraine. The Treasury vows to monitor and respond to Russia’s evolving sanctions evasion tactics while upholding the integrity of the international financial system.

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