Targeted Sanctions: US Takes Aim at 13 Crypto Firms Allegedly Linked to Russian Banks

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against 13 entities and two unnamed individuals for providing crypto services that could potentially aid Russian nationals in evading sanctions.

OFAC Cracks Down on Crypto Sector Assisting Russia in Evading Sanctions

Many of the sanctioned entities have allegedly offered services or facilitated transactions to assist other designated entities in avoiding sanctions, according to OFAC.

Brian E. Nelson, Under Secretary of Terrorism and Financial Intelligence, highlighted Russia's increasing reliance on alternative payment methods to bypass US sanctions and sustain its conflict with Ukraine.

Nelson emphasized the Treasury's commitment to identifying and disrupting companies enabling sanctioned Russian financial institutions to access the global financial system.

OFAC noted that numerous sanctioned crypto firms have engaged in transactions with prohibited Russian banks, exchanges, and darknet markets using cryptocurrencies.

Chainalysis Report Exposes Netex24 and Bitpapa for Facilitating Large-Scale Crypto Transfers to Sanctioned Russian Entities

Blockchain analytics firm Chainalysis reported that most of the sanctioned entities and individuals have ties to Russia through the services they offer.

Among the sanctioned firms, Netex24 and Bitpapa were singled out for facilitating substantial crypto transfers to sanctioned groups in the past two years, as confirmed by Chainalysis.

Netex24 reportedly provides crypto off-ramping services for sanctioned Russian banks, while Bitpapa operates a peer-to-peer crypto exchange platform accessible to Russian nationals.

Chainalysis Reveals Netex24 and Bitpapa Facilitate Funds Flow to Sanctioned Russian Entities and Dark Web Illicit Services

A considerable portion of the outflows from Netex24 and Bitpapa was directed towards illicit services on darknet markets, according to Chainalysis.

Chainalysis observed a steady increase in the value transferred by Netex24 and Bitpapa to sanctioned entities and darknet markets since the onset of Russia's conflict with Ukraine.

OFAC appears to be intensifying its efforts to combat sanctions evasion through crypto businesses facilitating transactions for sanctioned Russian banks.