The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned thirteen entities and two individuals for operating in the financial services and technology sectors of the Russian Federation economy “including persons developing or offering services in virtual assets that enable the evasion of U.S. sanctions.”
Five entities were designated for “being owned or controlled by OFAC-designated persons.”
Many of the individuals and entities designated “facilitated transactions or offered other services that helped OFAC-designated entities evade sanctions.”
These designations build upon OFAC’s February 23, 2024 action “to target companies servicing Russia’s core financial infrastructure and curtail Russia’s use of the international financial system to further its war against Ukraine.”
Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson said:
“Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to fund its war against Ukraine. As the Kremlin seeks to leverage entities in the financial technology space, Treasury will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system.”
On February 24, 2024, the G7 Leaders “reaffirmed their commitment to step up efforts against the evasion and circumvention of G7 sanctions and export control measures.”
The companies designated by OFAC have “all either helped build or operate blockchain-based services for, or enabled virtual currency payments in, the Russian financial sector, thus enabling potential sanctions evasion.”
Joint Stock Company B-Crypto (B-Crypto) is a Moscow-based fintech company that has partnered with OFAC-designated Rosbank to “facilitate cross-border settlements for Russian exporters using virtual currencies. B-Crypto was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
Obshchestvo S Ogranichennoy Otvetstvennostyu Sistemy Raspredelennogo Reyestra (Masterchain) is a Moscow-based fintech company “that has agreements to issue digital financial assets, a term in Russia’s legal framework that refers to blockchain-based tokens that confer digital rights, with various OFAC-designated Russian banks, including VTB Bank and the Central Bank of Russia. Masterchain was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
Obshchestvo S Ogranichennoy Otvetstvennostyu Laitkhaus (Laitkhaus) is a Moscow-based fintech company that has “worked with OFAC-designated Sberbank and VTB Bank to issue, exchange, and transfer digital financial assets. Laitkhaus was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
Obshchestvo S Ogranichennoy Otvetstvennostyu Atomaiz (Atomaiz), a Moscow-based fintech company, is a registered digital financial asset operator that has “worked to tokenize precious metals and diamonds for Russian companies and is partnered with OFAC-designated Rosbank and Sovcombank. Atomaiz was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
Tokentrust Holdings Ltd., based in Cyprus, is “the majority shareholder of Atomaiz and was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
Obshchestvo S Ogranichennoy Otvetstvennostyu Veb3 Tekhnologii (Veb3 Tekhnologii) and Obshchestvo S Ogranichennoy Otvetstvennostyu Veb3 Integrator (Veb3 Integrator) are Moscow-based technology companies providing blockchain solutions and platforms “within the Russian financial sectors, with clients including OFAC-designated Sberbank and Alfa-Bank. Veb3 Tekhnologii and Veb3 Integrator were designated pursuant to E.O. 14024 for operating or having operated in the technology sector of the Russian Federation economy.”
For more details on the other companies, check here.
As a result of today’s action, all property and interests in property of the designated persons described above that “are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.”
In addition, any entities that are owned, “directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.”
In addition, foreign financial institutions that “conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC.”