The US Treasury’s Office of Foreign Assets Control (OFAC) on Monday sanctioned 13 entities and two individuals. They are accused of developing crypto-related services that could facilitate sanctions evasion on behalf of Russian nationals.

OFAC’s designations aim to curb Russia’s use of the global financial system in its conflict with Ukraine. Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said in a statement that:

“Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to fund its war against Ukraine.” The Treasury “will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system,” he added.

OFAC’s rules essentially forbid US individuals from transacting with designated entities within the US. Financial institutions and others are required to adhere to these sanctions to avoid serious repercussions. Engaging with the sanctioned parties via transactions can lead to severe consequences.

US Treasury Accuses Netex24 and Bitpapa of Alleged Wrongdoing

Several entities, including B-Crypto, Netex24, Tokentrust Holdings, Bitpapa, and Crypto Explorer, have been designated and identified by the US Office of Foreign Assets Control (OFAC) for their involvement in blockchain services in Russia. According to OFAC, Netex24 and Bitpapa are accused of using cryptocurrencies to conduct transactions with sanctioned banks, crypto exchanges, and darknet markets.

Chainalysis, a blockchain analysis company, released a blog providing further details on the activities of the sanctioned entities. According to the report, Netex24 and Bitpapa are alleged to have facilitated transactions for various pro-Russian militia and propaganda groups. Among these groups is MOO Veche, an OFAC-designated militia group.

Chainalysis indicates that these entities operate in regions such as Donetsk, Luhansk, or Crimea in Ukraine. This suggests their involvement in areas affected by territorial conflicts and geopolitical tensions.

Please note that the information provided is based on your statement, and my knowledge is limited to information available up until September 2021. For the most accurate and up-to-date information on these allegations, I recommend referring to official statements from relevant authorities or reliable news sources.

US Government Intensifies Scrutiny on Crypto Activities

The recent action taken by the US Office of Foreign Assets Control (OFAC) against the designated entities in the crypto space aligns with the US government’s increased scrutiny of the cryptocurrency industry over the past couple of years. The government has been targeting individuals and entities involved in illicit activities, including assisting groups like North Korea’s Lazarus Group in converting large amounts of cryptocurrency into fiat currency.

Furthermore, in January, OFAC imposed a fifth round of sanctions on networks associated with the Palestinian militant group Hamas. This action was in response to Hamas’ attacks on Israel that took place in October of the previous year. These sanctions highlight the US government’s efforts to address and disrupt illicit financing activities conducted through the use of cryptocurrencies.

It is worth noting that my knowledge is based on information available up until September 2021, and there may have been further developments since then. For the most accurate and up-to-date information on these matters, it is advisable to refer to official statements from the US government or reliable news sources.

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