Are Russian companies using cryptocurrencies to escape sanctions?

Are Russian companies using cryptocurrencies to escape sanctions?

The U.S. Department of the Treasury has imposed sanctions on 13 entities and individuals due to Russian operations involving assisting in evading sanctions through the use of digital assets.

In a recent press release, the Office of Foreign Assets Control (OFAC) under the Department of the Treasury pointed to activities of certain companies and individuals in the Russian financial and technological sectors. According to the statement, the majority of the listed companies have facilitated asset movement or aided individuals listed by OFAC in evading sanctions.

Cryptocurrency companies have been aiding Russian financing, and the agency revealed that five fully-owned companies, certain entities controlled by OFAC, are involved in this. Brian E. Nelson, the Treasury’s Deputy Assistant Secretary for Terrorist Financing and Financial Intelligence, stated that Russia is turning to other financial sources to evade U.S. sanctions.

This move comes as the United States aims to target Russian financial companies with sanctions to prevent further funds in its war against Ukraine. Over the years, global regulators have expressed regret over the use of cryptocurrencies to circumvent international sanctions and finance certain activities.

The listed entities include Joint Stock Company B Crypto, Masterchain, Laitkhaus, Atomaiz, Token Trust Holdings, TOEP, among others.

The U.S. sanctions, as mentioned above, involve the prohibition of assets of the company in the United States or control over American persons. Additionally, these assets must be reported to OFAC. All transactions related to these properties in the United States are also banned unless approved by OFAC.

Since the Russian invasion of Ukraine, the United States has imposed sanctions on some companies operating in its market and continues to expand sanctions to include companies facilitating money transfers through digital assets.

Last year, the world’s largest trading platform by volume, Binance, was in the midst of a regulatory crisis leading to its withdrawal from the Russian market. CommEx acquired the Russian entity of the company. It also announced the closure of its website by May 10th.

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