The US Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned three cryptocurrency exchanges for offering services used to evade economic restrictions imposed on Russia following its invasion of Ukraine in early 2022.
This includes Bitpapa IC FZC LLC, Crypto Explorer DMCC (AWEX), and Obshchestvo S Ogranichennoy Otvetstvennostyu Tsentr Obrabotki Elektronnykh Platezhey (TOEP).
In total, the designations cover thirteen entities and two individuals operating in Russia’s financial services and technology sectors.
“Many of the individuals and entities designated today facilitated transactions or offered other services that helped OFAC-designated entities evade sanctions,” Treasury said, adding that the action aims to “target companies serving Russia’s core financial infrastructure and restrict Russia’s use of the international financial market.” system to promote war against Ukraine”.
Bitpapa, which offers virtual currency exchange to Russian citizens, has been accused of facilitating millions of dollars’ worth of transactions with sanctioned Russian entities Hydra Market and Garantex.
Crypto Explorer, the Treasury said, offers currency conversion services between virtual currencies, rubles and UAE dirhams.
“AWEX offers cash services at its offices in Moscow and Dubai and also loads funds onto credit cards associated with OFAC-designated Russian banks such as Sberbank and Alfa-Bank,” it added.
Also sanctioned was another virtual currency exchange operated by TOEP which is alleged to have enabled digital payments in rubles and virtual currencies to sanctioned entities such as Sberbank, Alfa-Bank and Hydra Market.
Also on the sanctions list are Moscow-based fintech companies such as B-Crypto, Masterchain and Laitkhaus, which have collaborated with sanctioned Russian banks to issue, trade and transfer cryptocurrency assets.
Under the sanctions, all properties and interests in the United States linked to designated individuals and entities will be frozen. Furthermore, entities owned directly or indirectly at least 50% by one or more blocked persons will also be subject to the block.
“Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to finance its war against Ukraine,” said Brian E. Nelson, Treasury Under Secretary for Terrorism and Financial Intelligence.
“As the Kremlin seeks to exploit entities in the financial technology space, Treasury will continue to expose and impede companies seeking to help sanctioned Russian financial institutions reconnect to the global financial system.”