Mon, July 22, 2024

U.S. Treasury Expands Crypto Sanctions on 300 Entities

American families and ongoing situation

Quick Look:

  • On January 12, 2023, the U.S. imposed sanctions on 300 individuals and entities in Russia’s military-industrial complex.
  • Sanctions were applied to Andrey Sudakov of Polyus and Mu Xiaolu of Hong Kong for gold laundering.
  • In May 2023, OKO Design Bureau faced sanctions for soliciting cryptocurrency donations.
  • On June 12, 2024, the U.S. expanded sanctions to include Chinese semiconductor suppliers.

On January 12th, 2023, the U.S. Department of Treasury unveiled a comprehensive new set of sanctions aimed at curtailing the capabilities of the Russian military-industrial complex. These measures target a broad spectrum of 300 individuals and entities. Therefore aiming to obstruct their access to specific U.S. software and information technology. This strategic move follows Russia‘s transition to a full war economy. Further intensifying the international community’s efforts to impede its military operations.

On the same day, January 12, 2023, sanctions were also imposed on Andrey Sudakov, an employee of Polyus, a Russian state-owned gold producer. Alongside him, Mu Xiaolu from Hong Kong faced sanctions for orchestrating a sophisticated laundering scheme. This scheme involved converting payments from Russian-origin gold into fiat currency and cryptocurrencies, utilising various front companies based in the UAE and Hong Kong. VPower Finance Security Hong Kong Limited was crucial in providing blockchain-based logistics services for this operation.

Russian UAV Developer Sanctioned Over Crypto Donations

In May 2023, further sanctions targeted the Russian UAV developer, OKO Design Bureau. This company had been soliciting cryptocurrency donations through a Telegram channel, as revealed by blockchain forensics firm Chainalysis. The move highlights the increasing utilisation of digital currencies in funding military activities. As well as prompting the U.S. to tighten its scrutiny on such transactions.

The conflict between Russia and Ukraine persisted. The U.S. Treasury escalated its measures on June 12, 2024, by imposing additional sanctions. These measures were directed at specific individuals, including Andrey Dmitriyevich Sudakov and Chinese companies supplying semiconductors to Moscow. The sanctions extended to restricting access to certain U.S. software and IT services, with a stern warning to non-compliant companies about potential exclusion from the U.S. financial system.

Report Exposes Global Crypto Laundering Schemes

A report released on June 12, 2024, by blockchain intelligence firm TRM shed light on complex crypto laundering schemes. The findings implicated Chinese manufacturers, middlemen, and Russian cryptocurrency traders in facilitating payments to support Russia’s war efforts. The report underscored these illicit activities’ global and intricate nature, reinforcing the need for vigilant monitoring and enforcement.

In an effort to disrupt funding channels, the U.S. imposed sanctions on May 1, 2024, targeting crypto wallet addresses linked to the drone maker OKO Design Bureau. The bureau had been actively soliciting cryptocurrency donations via Telegram, further demonstrating the pervasive role of digital currencies in supporting sanctioned entities.

Crackdown on Russian Blockchain Companies in March 2024

March 2024 saw a targeted approach towards Russian blockchain companies involved in sanctions evasion. Furthermore, these companies facilitated cryptocurrency transactions with sanctioned banks, exchanges, and darknet markets on behalf of Russian nationals. This action represents a significant step in dismantling networks that enable the circumvention of international sanctions.

In June 2024, the Office of Foreign Assets Control (OFAC) updated its sanctions list, imposing new restrictions on access to U.S. software and IT services. Besides, the update also included foreign financial institutions engaged in substantial transactions or services with blocked individuals. Therefore enhancing the scope of financial restrictions. Additionally, five sanctioned Russian financial institutions had their foreign locations added to the Specially Designated Nationals (SDN) list, encompassing entities such as the Moscow Exchange (MOEX), the National Clearing Center (NCC), and the Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD).

Strategic Sanctions Aim to Thwart Russian War Efforts

The U.S. Treasury’s persistent efforts to impose sanctions reflect a strategic approach to counteract Russia’s military and economic manoeuvres. The sanctions aim to curtail the resources available for Russia’s war efforts by targeting key individuals, entities, and financial networks. The evolving sanctions landscape underscores the importance of international cooperation and advanced monitoring techniques to effectively address these complex global challenges.


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