US government files the first case of evading crypto sanctions


The US Justice Department is prosecuting the
operator of a payment platform used to evade sanctions using cryptocurrency.
The prosecution could mark the first legal action
taken against crypto-related sanctions evasion, demonstrating two things: how
effectively crypto can circumvent financial blocks and how credible it is with
law enforcement.
In a historic move, the U.S. government is set to
file charges against an unnamed defendant who used cryptocurrencies to evade
sanctions in a shady scheme. The government claims, based on the judgment, that
the defendant operated an online payment platform in a sanctioned country. The
defendant, whose identity stays hidden, allegedly transferred $10 million in
bitcoins to Cuba, Iran, Syria, North Korea, or Russia.
As noted in the court document, “The Payments
Platform advertised its services as designed to evade U.S. sanctions, including
through purportedly untraceable virtual currency transactions.”
Moreover, the defendant opened an account with a
U.S.-based cryptocurrency exchange to purchase and sell Bitcoin. Thousands of
dollars were then sent to two other accounts at foreign exchanges. Furthermore,
the defendant used multiple accounts to transmit more than $10 million of
Bitcoin between the U.S. and the unnamed sanctioned country.
In June, the FBI recovered bitcoin collected from
the Colonial Pipeline ransomware attack, demonstrating the traceability of
crypto.
Legislators have been vocal since Russia invaded
Ukraine regarding the potential for cryptocurrency to help people evade
sanctions. Ukraine's government received millions of dollars via cryptocurrency
donations, but many Russian individuals also turned to crypto after they were
cut off from outside financial support.

Pavan A
CBW - External Analyst
INDIA