Crypto firms linked to Russia face US sanctions for evasion


  • The OFAC recently sanctioned 13 entities and two individuals for aiding sanction evasion through cryptocurrency.
  • These sanctions are aimed at entities facilitating transactions to help other sanctioned entities evade U.S. sanctions.
  • Brian E. Nelson emphasized Russia’s shift to alternative payment mechanisms to continue funding military actions against Ukraine.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently announced sanctions against 13 entities and two individuals. These sanctions target those aiding the potential evasion of sanctions on behalf of Russian nationals through cryptocurrency-related services. OFAC’s statement emphasized the role of these entities and individuals in facilitating transactions to assist other sanctioned entities in evading U.S. sanctions.

Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, highlighted Russia’s shift towards alternative payment mechanisms. This move aims to bypass U.S. sanctions and continue funding its military actions against Ukraine. Nelson affirmed the Treasury’s commitment to identifying and disrupting companies aiding sanctioned Russian financial institutions in reconnecting with the global economic system.

Russian entities boost crypto transfers to darknet

Blockchain analytics firm Chainalysis provided insights into the operations of the sanctioned entities. The firm noted that most of these entities and individuals are based in Russia. They are linked to Russia through the cryptocurrency services they provide. Among the sanctioned entities, Netex24 and Bitpapa were particularly noted for their transactions with OFAC-sanctioned banks, crypto exchanges, and darknet markets.

Chainalysis reported that Netex24 and Bitpapa have been instrumental in facilitating funds transfers to sanctioned entities over the past two years. Their transaction history showed a significant portion of outflows directed toward darknet markets and other illicit services. The research highlighted a steady increase in the value sent by these entities to sanctioned entities and darknet markets since the onset of Russia’s conflict with Ukraine.

OFAC targets crypto for sanction evasion fight

The OFAC’s action against these entities signals an increasing focus on combating sanctions evasion through cryptocurrency. This approach particularly targets businesses that facilitate on- and off-ramp activities for sanctioned Russian banks. Chainalysis’s findings underscore the significance of darknet markets in the transaction history of Netex24 and Bitpapa, alongside a constant flow to exchanges lacking strict know-your-customer guidelines.

The sanctions against these 13 entities and two individuals represent a critical step in the U.S.’s efforts to prevent sanction evasion. The Treasury’s proactive measures aim to limit Russia’s access to alternative financial networks. This strategy underscores the importance of transparency and regulation in the global cryptocurrency market to prevent misuse by sanctioned entities.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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