12 Russian Crypto Companies Hit with United States OFAC Sanctions Over Evasion

The U.S. Treasury Department has ramped up its economic pressure campaign against Russia, sanctioning over a dozen entities and individuals operating in the financial services and technology sectors for allegedly enabling sanction evasion related to the Ukraine war.

In actions announced on Tuesday, the Treasury’s Office of Foreign Assets Control (OFAC) specifically targeted several cryptocurrency firms accused of facilitating prohibited transactions or providing services to already-sanctioned Russian banks and entities.

OFAC Sanction and Crackdown on Russian Fintech

Among the firms hit were Moscow-based fintechs B-Crypto, Masterchain, Laitkhaus, and Atomaiz, which OFAC alleges partnered with or serviced major Russian banks like Rosbank, VTB Bank, Sberbank, and Sovcombank to conduct cross-border settlements and issue digital financial assets secured by precious metals and diamonds.

Another firm, TOEP, which operates the virtual currency exchanges Netexchange and Netex24, was sanctioned for allegedly facilitating digital payments and conversions with sanctioned entities including Sberbank, Alfa-Bank, and the sanctioned darknet market Hydra.

Peer-to-peer crypto exchange Bitpapa and the firm Crypto Explorer were also designated for conducting large transactions with sanctioned entities Hydra and Garantex.

Brian E. Nelson, Under Secretary for Terrorism and Financial Intelligence, stated the actions were necessary to “expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system” as the Kremlin increasingly looks to leverage fintech firms.

The sanctions effectively cut the designated firms off from the U.S. financial system by blocking any assets they hold in the U.S. Foreign financial institutions face sanctions risk if they facilitate significant transactions involving these firms.

Wider Technology Sector Targeted Amid Continuing Economic Pressure Campaign

In addition to crypto firms, OFAC took action against several Russian technology companies including Veb3 Tekhnologii and Veb3 Integrator for providing blockchain platforms and services to major Russian banks like Sberbank.

The Department also sanctioned firms associated with the Echelon Union for Science and Technology, an entity licensed by Russian security services, for operating in Russia’s technology sector.

These latest designations build on OFAC’s previous moves earlier this year to cut off major Russian banks from the global financial system as part of international efforts to pressure Russia to cease its war in Ukraine.

As Russia explores alternative payment rails and other sanctions workarounds, the Treasury vows to keep monitoring and disrupting these evolving evasion tactics while maintaining the integrity of the financial system.