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US Sanctioned 13 Crypto Firms For Alleged Involvement With Russian Banks
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US Sanctioned 13 Crypto Firms For Alleged Involvement With Russian Banks

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Monday sanctioned 13 crypto firms alongside two unnamed individuals for building crypto services to potentially help Russian nationals evade sanctions.

Many of those sanctioned offered services or facilitated transactions to assist other designated entities in dodging sanctions, OFAC said in a statement.

“Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to fund its war against Ukraine,” said Brian E. Nelson, Under Secretary of Terrorism and Financial Intelligence.

Nelson added that the Treasury will keep exposing and disrupting companies that enable sanctioned Russian financial institutions to reconnect to the global financial system.

OFAC pointed out that many of the sanctioned crypto firms have transacted with barred Russian banks, exchanges and darknet markets using crypto.

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Blockchain analytics firm Chainalysis said in a blog post that most of the sanctioned entities and people are Russia-linked through the services they offered.

Of the sanctioned firms, two have been highlighted having facilitated significant crypto transfers to sanctioned groups over the past two years. 

These two firms are Netex24 and Bitpapa, Chainalysis confirms, citing on-chain data.

According to Chainalysis, Netex24 facilitates off-ramping crypto services for sanctioned Russian banks (the report cites Tinkoff and Sberbank). 

On the other hand, Bitpapa operates a peer-to-peer (P2P) crypto exchange platform that is open to Russian nationals. 

It was not specified whether this P2P platform was exclusive to the aforementioned demographic.

Darknet markets made up a large share of the outflows from Netex24 and Bitpapa to illicit services, per Chainalysis.

“Value sent by Netex24 and Bitpapa to sanctioned entities and darknet markets has steadily increased since the start of Russia’s war in Ukraine,” Chainalysis wrote.

Chainalysis said it seems OFAC is focusing more on combating sanctions evasion via crypto businesses that enable sanctioned Russian banks’ on- and off-ramps.

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