The US Treasury has announced that it imposed sanctions on Russian financial services and technology participants for providing services in virtual assets intended to evade Ukraine. As per the information detailed in the press release, the Department of the Treasury’s Office of Foreign Asset Control (OFAC) enforced sanctions on 13 entities and two individuals for operating in the financial services and technology sectors of the Russian Federation economy, including individuals developing or providing services in virtual assets that allow the evasion of US sanctions.

US Treasury’s basis for the sanctions In its announcement, OFAC mentions that individuals and entities designated facilitated transactions or delivered other services that supported OFAC-appointed entities evade sanctions. The designations follow OFAC’s action from February 2024 when the organisation targeted companies providing services to Russia’s core financial infrastructure and reduced the country’s use of the international financial system to further its war against Ukraine. According to OFAC’s officials, Russia is turning to alternative payment methods to bypass US sanctions and proceed with funding its war against Ukraine. Considering the current situation, the US Treasury aims to continue to expose and mitigate the companies that seek to support sanctioned Russian financial institutions to reconnect to the global financial system.

In addition, the press release mentions that five of the entities that were designated for being owned or controlled by individuals were already sanctioned by OFAC. One of the firms targeted is Atomyze, which was included due to its work to tokenise precious metals and diamonds for Russian companies and its collaborations with sanctioned Russian banks Rosbank and Sovcombank. Other companies included on OFAC’s designated nationals list include Lighthouse, B-Crypto, Masterchain, and Veb3 Technology.

The sanctions generally bank the designees from US dollar transactions and the US financial system. OFAC’s measures on the designees The current actions conducted by OFAC led to blocking all property and interests in property of the designated individuals previously mentioned that are in the US or the possession or control of US persons, with the organisation stating that they must also be reported. Moreover, any entities that are owned individually or in the aggregate, 50% or more by one or more blocked persons are also prohibited.

Also, unless authorised by a licence issued by OFAC, the regulations generally block all transactions by US persons or within the US that include any property or interests in property of designated or otherwise prohibited persons. .