In light of Russia’s invasion of Ukraine and the ensuing sanctions applied by the US government, the New York Department of Financial Services (DFS) has moved to shore up its ability to apply sanctions by expediting the purchase of blockchain technology. According to a statement by DFS, New York Governor Kathy Hochul has boosted DFS’s ability to investigate potential evasion of sanctions.
Governor Hochul stated:
“Like millions across the globe, New Yorkers are watching the situation in Ukraine with fear and outrage, and in response, we are taking further action. We stand shoulder to shoulder with the people of Ukraine and will continue to do our part to enforce U.S. sanctions against Russia in response to their unwarranted attack. New York is proudly home to the nation’s largest Ukrainian population and we will use our technological assets to protect our people and show Russia that we will hold them accountable.”
Blockchain analytical tools are expected to bolster the DFS’s ability to detect expose virtual currency businesses to Russian individuals, banks, and other entities.
Today, there are multiple firms providing analytical tools to track and reveal crypto transactions.
While many people have worried that crypto may be a path to avoid financial sanctions most people believe the market is simply too small for crypto to provide any relief to the Russian government. There is some concern that Russian elites, or oligarchs, may utilize crypto to work around sanctions targeting them.
It was reported that DFS has been assessing a number of technology tools and service providers to augment current supervisory capabilities. Procurement is expected to strengthen the Department’s ability to enforce anti-money laundering and Bank Secrecy Act laws today and going forward.
Superintendent of Financial Services Adrienne A. Harris added:
“We know that bad actors will try to evade sanctions through the transmission of virtual currency, which is why it is imperative that we have the ability to monitor transactions and exposure in real-time. We continue to coordinate closely with federal and other state regulators and communicate with our regulated entities to ensure the full weight of our regulatory regime is brought to bear in the fight to protect Ukraine.”
This action follows Governor Hochul’s Executive Order directing all New York State agencies and authorities to review and divest public funds from Russia.