The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an alert to financial institutions directing them to be on the lookout for ways that Russia may use to avoid sanctions.
Per the press release issued Monday, FinCEN warned banks and other financial firms to ramp their oversight on transactions related to ‘convertible virtual currencies,’ a term used by FinCEN to describe unregulated cryptocurrencies. The notice read:
“While large scale sanctions evasion using convertible virtual currency (CVC) by a government such as the Russian Federation is not necessarily practicable, CVC exchangers and administrators and other financial institutions may observe attempted or completed transactions tied to CVC wallets or other CVC activity associated with sanctioned Russian, Belarusian, and other affiliated persons.”
Meanwhile, FinCEN acting director Him Das acknowledged that there has been little evidence of Russia will use cryptocurrencies. “Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,” he noted.
Several countries have imposed sanctions against Russia for breaking international law and declaring war against Ukraine. Countries, including the US, the European Union, Japan, Switzerland, Singapore, and South Korea have taken measures against the country’s oligarchs, lawmakers, and state actors, restricting their access to their accounts in the nations.
Singapore recently barred its country’s financial institutions from providing services that would aid Russia’s government in raising new funds, including cryptocurrencies, amongst other sanctions. Ukrainian lawmakers, including its vice prime minister, called on cryptocurrency exchanges to freeze Belarusian and Russian-related users’ accounts. However, the plea was declined by several exchanges, including Binance and Coinbase.