Targeted Entities
The US Treasury Department has designated 13 companies and 2 individuals for allegedly helping Russia evade sanctions through crypto services. These entities include:
- Companies operating in Russia’s financial and technology sectors
- Individuals developing and offering crypto services that enable sanctioned Russian entities to avoid sanctions
Impact of Sanctions
The sanctions prohibit any transactions or interactions between the designated entities and US individuals. This is part of a broader effort by the US and G7 to prevent sanctioned parties from using crypto to bypass sanctions.
Evidence of Evasion
Blockchain research firm Chainalysis analyzed two of the designated entities, Netex24 and Bitpapa. The report found that:
- Both companies facilitated significant transactions to sanctioned entities over the past two years
- They have weak or non-existent Know Your Customer (KYC) controls, allowing for anonymous transactions
- They have connections to darknet markets and Russian-language sites offering illegal activities
Outflows to Sanctioned Entities and Darknet Markets
Chainalysis also found that a large portion of funds from Netex24 and Bitpapa were sent to:
- Sanctioned Russian entities
- Darknet markets
US Government’s Response
The US government is intensifying its efforts to combat sanctions evasion through crypto services. This includes:
- Sanctioning entities involved in crypto transactions linked to terrorist groups
- Targeting crypto mixers that facilitate illegal activities
