Treasury Sanctions Pro-Russia Groups Raising Funds With Crypto

By Jason Nelson

In response to the ongoing Russian invasion of Ukraine, the U.S. Treasury Department today announced the addition of 22 individuals and two entities tied to the Russian government to the Office of Foreign Assets Control (OFAC) sanctions list.

The list includes entities that OFAC says supported Russia's invasion, including Task Force Rusich, an alleged neo-Nazi paramilitary group that the agency says participated in combat alongside Russia's military in Ukraine.

"Today's action is being taken in coordination with those taken by the U.S. Department of Commerce, which is imposing additional export control measures to further align with partners and allies, as well as by the U.S. Department of State, which is targeting Russia's defense and high-technology industries," the Treasury Department said in a press release.

In addition to adding Task Force Rusich to its sanction list, OFAC also published and blacklisted Bitcoin, Ether, and USDT cryptocurrency addresses tied to the group.

Before Russia launched its invasion in February of this year, crypto donations began pouring into the region as both sides turned to global supporters, using digital assets to circumvent border restrictions.

In July, the blockchain analytics firm Chainalysis reported that groups tied to Russia had raised $2 million in cryptocurrency, with the vast majority of funds sent in Bitcoin ($1.45 million) and Ethereum ($590,000), with "considerable quantities" sent in Tether, Litecoin, and Dogecoin as well.

In contrast, by March 2022, Ukraine received nearly $100 million in cryptocurrency donations, including Bitcoin, Ethereum, TRON, Polkadot, Dogecoin, and Solana, according to blockchain analytics platform Elliptic. These donations included $5 million from Ethereum co-founder Vitalik Buterin.

OFAC stepped up its investigation and sanctioning of crypto addresses in recent months, including adding the Tornado Cash coin mixing service and several Ethereum addresses, citing the service’s use in money laundering.

"The United States will continue to take strong actions to hold Russia accountable for its war crimes, atrocities and aggression," said Secretary of the Treasury Janet L. Yellen in a statement. "As Ukraine presses forward with defending its freedom, today we're taking steps to further degrade Russia's ability to rebuild its military, hold perpetrators of violence accountable, and further financially isolate Putin."

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