The United States Financial Crimes Enforcement Network, or FinCEN, an office of the Treasury Department, has warned financial institutions to consider cryptocurrencies as a possible means Russia may attempt to use to evade sanctions related to military action. of the country in Ukraine.
In an alert on Monday, FinCEN remembered US-based financial institutions โwith cryptocurrency visibilityโ and convertible virtual currency, or CVC, to report any activity that could be considered a potential way for Russia to evade sanctions imposed by the US and its allies. While the US watchdog said the Russian government's use of CVCs to evade large-scale sanctions "was not necessarily practicable," financial institutions were required to report such activities by Russian and Belarusian individuals. named in actions that many have called "economic warfare".
โIn the face of mounting economic pressure on Russia, it is critically important that US financial institutions remain vigilant for possible Russian sanctions evasion, including by state actors and oligarchs,โ said Him Das, who has been the Acting Director of FinCEN since August. 2021. โAlthough we have not seen widespread evasion of our sanctions using methods such as cryptocurrencies, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people.โ
Many US lawmakers and agencies have spoken out about Russia-based individuals and banks that might try to use crypto to evade sanctions announced by President Joe Biden on February 24. The Treasury Department's Office of Foreign Assets Control, the agency responsible for administering and enforcing US sanctions, warned US residents on February 28 not to use digital currencies to benefit the government of Russia or central bank. OFAC guidelines equated crypto transactions with "deceptive or structured transactions or dealings."
Related: Coinbase Proposes Crypto to Promote Global Sanctions Compliance
US and EU lawmakers have also been drawing attention to the potential for Russia to use crypto assets as the country's options dwindle amid the disruption of the SWIFT payment network and its major listed banks. sanctions lists. Bloomberg reported on Monday that President Biden will sign an executive order create a comprehensive regulatory framework on cryptocurrencies sometime this week in response to the escalation of the military situation in Ukraine.
There have been many ups and downs in crypto EO, but this week's timeline is real. CNBC @kaylatausche is also confirming our report. https://t.co/6uFj8HFSjH
โJennifer Epstein (@jeneps) March 7, 2022
Mykhailo Fedorov, Ukraine's minister for digital transformation, has directly appealed to cryptocurrency exchanges on social media, urging them to block addresses of Russian users. However, many exchanges, including Binance and Kraken, have said that they will not act unilaterally to prevent all users in Russia from accessing their coins unless there is a legal requirement for them to do so.
I am asking all major crypto exchanges to block addresses of Russian users.
It is crucial to freeze not only addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
โ Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
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