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US Treasury Sanctions Entities for Crypto-Related Services
The US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 entities and two individuals for developing crypto-related services that could facilitate sanctions evasion on behalf of Russian nationals.
Sanctions Aimed at Curbing Russia’s Use of Financial System
OFAC’s designations aim to curb Russia’s use of the global financial system in its conflict with Ukraine. Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, stated that Russia is turning to alternative payment mechanisms to circumvent US sanctions and continue funding its war against Ukraine. The Treasury will continue to expose and disrupt companies aiding sanctioned Russian financial institutions.
Consequences of Engaging with Sanctioned Entities
OFAC’s rules prohibit US individuals from transacting with designated entities within the US. Financial institutions and others must adhere to these sanctions to avoid severe repercussions. Engaging with sanctioned parties via transactions can lead to serious consequences.
Entities Involved in Crypto Transactions
B-Crypto, Netex24, Tokentrust Holdings, Bitpapa, and Crypto Explorer are among the newly-designated entities. OFAC alleges that Netex24 and Bitpapa used crypto to transact with sanctioned banks, crypto exchanges, and darknet markets.
Allegations Against Netex24 and Bitpapa
Chainalysis reported that Netex24 and Bitpapa facilitated transactions for pro-Russian militia and propaganda groups, including an OFAC-designated militia group called MOO Veche. These entities operate in regions like Donetsk, Luhansk, or Crimea in Ukraine.
US Government’s Focus on Crypto Activities
OFAC’s move follows the US government’s increased scrutiny on the crypto space. In the past two years, it has sanctioned crypto traders aiding North Korea’s Lazarus Group and networks associated with Palestinian militant group Hamas in response to attacks on Israel.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
