March 25, 2024 at 05:26PM
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Bitpapa and Crypto Explorer for dealing with OFAC-designated Russian entities, Hydra Market and banks. The move aims to disrupt Russian attempts to evade sanctions. The sanctions freeze assets and prohibit transactions involving the designated entities, posing risks to engaging parties. Multiple other Russian fintech companies and individuals were also designated for evading sanctions.
Based on the meeting notes, here are the key takeaways:
1. The US Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned two cryptocurrency exchanges, Bitpapa IC FZC LLC and Crypto Explorer DMCC (AWEX), for their involvement with OFAC-designated Russian dark web markets and banks.
2. Bitpapa IC FZC LLC, a peer-to-peer virtual currency exchange, has facilitated millions of dollars in transactions with two OFAC-designated Russian entities, Hydra Market and Garantex. Hydra Market was a large darknet market for selling drugs and money laundering, with a turnover of $1.35 billion in 2020 and 19,000 registered seller accounts.
3. Crypto Explorer DMCC (AWEX) operates as a crypto exchange in Russia and the United Arab Emirates, facilitating conversions between virtual currencies, rubles, and UAE dirhams. It also provides cash services in Moscow and Dubai, allowing customers to load funds onto OFAC-designated Russian banks.
4. OFAC also sanctioned multiple other Russian fintech companies and their owners for working with OFAC-designated Russian financial institutions to help Russian companies and nationals evade sanctions.
5. As a result of the sanctions, all assets and interests in the United States connected to designated individuals and entities will be frozen. Transactions involving these assets will be prohibited unless authorized by OFAC, and financial institutions and parties engaging with sanctioned entities and individuals will be at risk of exposure to sanctions or enforcement actions.
6. Additionally, OFAC previously sanctioned the Moscow-based cryptocurrency exchange Garantex in April 2022, and designated cryptocurrency mixing services Sinbad, Tornado Cash, and Blender.io as money-laundering tools by the North Korean Lazarus hacking group.
These takeaways highlight the significant actions taken by OFAC in response to the involvement of cryptocurrency exchanges with OFAC-designated entities and the use of cryptocurrency in illegal activities.