US Sanctions Russian Entities Accused of Enabling Avoidance of Digital Currency Sanctions Achi-News

WASHINGTON: The United States on Monday imposed sanctions on a collection of fintech companies and people, mostly in Russia, accused of enabling sanctions evasion.

The Treasury’s Office of Foreign Assets Control approved 13 companies – five of which are owned by an already approved person – and 2 people who have all either helped build or operate blockchain-based services for, or enable virtual currency payments in the financial sector in Russia, “enabling the avoidance of potential penalties,” according to the US Treasury.

Included in Monday’s sanctions are a Moscow-based group of fintech companies and a virtual currency exchange in Russia and the United Arab Emirates, among others.

Lawmakers and administration officials have voiced concerns that Russia may be using cryptocurrency to avoid pain from the avalanche of sanctions imposed on banks, oligarchs and the energy industry in response to Russia’s February 2022 invasion of Ukraine.

Experts say a growing reliance on digital currency would be an inevitable route for Russia to try to maintain its financial transactions, but Treasury officials have rejected the claim that digital currency could be the main driver of sanctions evasion.

“Russia is increasingly turning to alternative payment mechanisms to avoid US sanctions and continue to finance its war against Ukraine,” Under Secretary of the Treasury Brian E. Nelson.

“As the Kremlin seeks to leverage entities in the fintech space, the Treasury will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect with the global financial system.”

State Department spokesman Matthew Miller said Monday’s action “confirms the G7’s commitment to curtail Russia’s use of the international financial system to fuel its war against Ukraine.” It also reflects our ongoing efforts to target companies that serve Russia’s core financial infrastructure.”

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Associated Press)