Crypto Addresses Linked to Sanction Evasion Will Be Listed: US Treasury

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The US Treasury announced that it will list crypto addresses on its Specially Designated Nationals as a means to prevent sanction evasion.

The US Treasury has imposed sanctions on 22 individuals and entities that support Russia’s military-industrial complex and evade global sanctions. The action, part of the Treasury’s strategy to target sanctions evasion, is taken through the Russian Elites, Proxies, and Oligarchs (REPO) Task Force. 

The task force is a multilateral effort to identify, freeze and seize assets of sanctioned Russians around the world. The sanctions target a network led by Russia- and Cyprus-based arms dealer Igor Zimenkov and his son Jonatan Zimenkov. They allegedly enabled Russian defense sales to third-country governments and facilitated Belarusian military-industrial sales in Latin America. 

The Zimenkov network has used front companies to funnel money within the network. But, this move by the Treasury aims to shut off the opportunities for Russia to evade or circumvent US sanctions.

Sanctions Evasion via Crypto

The US Treasury’s Office of Foreign Assets Control has also taken a major step in its efforts to tackle sanctions evasion through cryptocurrencies, by listing two crypto addresses, one in Bitcoin and one in Ethereum, connected to a Russian group accused of evading sanctions. The move announced on February 1, aims to methodically and intensively target sanctions evasion efforts globally.

Jonatan Zimenkov is allegedly connected to at least one Bitcoin and one Ethereum address. 

According to the Treasury, the sanctions evasion network, which Jonatan is accused of materially supporting, was involved in supplying technology to a Russian company after the country’s invasion of Ukraine in February 2022. It also allegedly supported, state-owned Russian defense entities including Rosoboronexport and Rostec.

The Treasury’s announcement revealed that the Bitcoin address listed in the sanctions contained no balance at the time of publication. The Ethereum address also contained no tokens. But, it showed evidence of four transactions in early 2022 totaling roughly 5,463 ETH, which was worth more than $16 million at the time.

In recent times, the US Treasury has ramped up its efforts to include cryptocurrency wallets in its sanctions efforts. The department recently barred US residents from using the Tornado Cash mixer.

This move by the Treasury is an indication of its determination to crack down on sanctions evasion efforts via crypto. Some people debate whether cryptocurrencies alone are at fault for the increasing attempts to launder money.

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