The United States has taken a significant step in its efforts to combat sanctions evasion by imposing sanctions on a group of fintech firms and individuals, primarily based in Russia. The move, announced by the Treasury’s Office of Foreign Assets Control, targets entities that have allegedly facilitated sanctions evasion through the provision of blockchain-based services and virtual currency payments in the Russian financial sector.
According to the U.S. Treasury, the sanctions cover 13 firms, five of which are owned by individuals already under sanctions, as well as two individuals who have played roles in developing or operating blockchain services or enabling virtual currency transactions in Russia. Among the entities sanctioned are several Moscow-based fintech companies and a virtual currency exchange with operations in Russia and the United Arab Emirates.
The decision to impose sanctions comes amid concerns raised by lawmakers and administration officials about the potential use of cryptocurrency by Russia to circumvent the impact of sanctions imposed in response to its invasion of Ukraine in February 2022. While experts suggest that cryptocurrency could offer Russia a means to sustain its financial activities, Treasury officials have dismissed claims that it is a primary driver of sanctions evasion.
Treasury Under Secretary Brian E. Nelson emphasized that Russia is increasingly turning to alternative payment methods to evade U.S. sanctions and finance its military campaign in Ukraine. He stated that the Treasury will continue to target and disrupt companies in the financial technology sector that assist sanctioned Russian entities in reconnecting with the global financial system.
A State Department spokesperson echoed the sentiment, highlighting that the latest sanctions reaffirm the commitment of the G7 nations to restrict Russia's exploitation of the international financial system to support its actions in Ukraine. The spokesperson emphasized ongoing efforts to target entities that provide services to Russia's core financial infrastructure.
