The Financial Crimes Enforcement Network (FinCEN) has published guidance on Russian efforts to dodge restrictions, which includes a number of crypto-related transactions. The bureau did admit, however, that it has not seen “widely dodging” of its restrictions by using cryptocurrency.
The Financial Crimes Enforcement Network (FinCEN) has Issued a Warning about Punitive Measures Violation
The Financial Crimes Enforcement Network, a division of the US Treasury Department, released an alert regulated financial institutions to “possible Russian restrictions violation tactics.”
“It is very important for U.S. financial institutions to be vigilant about potential Russian sanctions evasion, including by both state actors and oligarchs,” said Him Das, acting head of FinCEN. He went on to say:
Although we have not seen extensive use of Bitcoin to escape our restrictions, early reporting of suspected behaviour aids our national security and our efforts to protect Ukraine and its people.
Large-scale restrictions avoidance utilizing cryptocurrencies by a country like the Russian Federation is “not necessarily possible,” according to the notification. However, the regulator warned that transactions involving crypto wallets or other crypto activity could be linked to sanctioned Russian, Belarusian, and other related individuals.
Financial Crimes Enforcement Network also warns financial firms about the dangers of Russian-linked malware activities.
A consumer receiving convertible virtual currency (CVC) “from an external wallet, then instantly initiating repeated, quick exchanges across multiple CVCs with no obvious linked reason, followed by a transaction off the platform” is another warning flag. FinCEN explains:
This could indicate that attempts have been made to disrupt the chain of custody on the individual blockchains or complicate the transaction even more.
Finally, the authority emphasised that all financial firms, along with cryptocurrency exchanges, “should quickly determine and report suspicious activity associated with the potential punitive measures avoidance and conducting effective, risk-based customer proper research or improved background research as actually needed.”
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