OFAC sanctions Russian providers of digital financial assets

Treasury Department has sanctioned Russian providers of digital financial assets, saying many of the designated entities offered services that helped evade sanctions.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned 13 entities and two individuals, who operated in Russia‘s fintech sector to offer services to evade U.S. sanctions.

According to a press release on Mar. 25, the sanctions target companies servicing Russia’s “core financial infrastructure and curtail Russia’s use of the international financial system to further its war against Ukraine.” Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson, highlighted that the objective is to hinder Russia’s capacity to seek alternative payment avenues as a means to evade sanctions.

“Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to fund its war against Ukraine.” Brian Nelson

The sanctioned entities are accused of involvement in building or operating blockchain-based services or enabling virtual currency payments in Russia, potentially facilitating sanctions evasion.

Among the entities targeted is B-Crypto, a Moscow-based fintech company partnered with Rosbank, controlled by Russian oligarch Vladimir Potanin, who is himself under U.S. sanctions. Another sanctioned entity is Atomaiz, a fintech firm owned by Potanin’s Interros Holding investment group. Additionally, Cyprus-based Tokentrust, a majority shareholder of Atomaiz, has also been sanctioned.

OFAC also imposed sanctions on Masterchain and Laitkhaus for their dealings with Russia’s sanctioned banks VTB Bank and Sberbank, as well as on Veb3 Tekhnologii (formerly Waves Enterprise).

Furthermore, the list includes Tsentr Obrabotki Elektronnykh Platezhey, operating Moscow-based crypto exchange services Netexchange and Netex24, along with exchange platforms Bitfingroup, Crypto Explorer, and Bitpapa, for their connections with Russian entities Hydra Market, Garantex, or sanctioned Russian banks.