Treasury warns against Russia’s efforts to evade sanctions with cryptocurrencies

Russian President Vladimir Putin could use cryptocurrencies to evade U.S. and other sanctions launched against the Kremlin for its unprovoked invasion of Ukraine, a Treasury official told lawmakers Tuesday.

“Yes, senator, that’s possible,” Elizabeth Rosenberg, Treasury’s assistant secretary for Terrorist Financing and Financial Crimes, said when Sen. Elizabeth Warren, D-Mass., asked her if digital assets could be used to skirt sanctions.

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The Senate Committee on Banking, Housing and Urban Affairs convened the hearing to discuss the next steps for deterrents against Russia’s continued aggression against Ukraine, such as the seizure of assets from Russian oligarchs and the G-7 call to cap the price of Russian oil.

Warren said she’d been concerned about the possibility of cryptocurrencies being used by Russian elites to bypass sanctions since the country invaded Ukraine in February.

“Back then we already knew that countries like North Korea had used crypto to skirt sanctions and launder at least hundreds of millions of dollars. And Russia could easily be part of that,” Warren said.

The Treasury Department has already identified Russian entities attempting to circumvent sanctions with crypto. Twenty-two individuals and two entities, including a neo-Nazi paramilitary group, were designated this month for helping Russia digitally finance the war on Ukraine.

In April, the agency targeted a virtual currency mining agency for the first time, along with oligarch Konstantin Malofeyev, privately owned commercial bank Public Joint Stock Company Transkapitalbank and 40 other individuals and entities led by Malofeyev.

Russia-based Darknet Market Hydra and Garantex, a virtual currency exchange, were also sanctioned that month partly to cut off avenues for potential sanctions evasion.

Article source: https://www.cnbc.com/2022/09/20/treasury-department-russia-avoid-sanctions-using-crypto.html