Regulatory intelligence for US exporters

OFAC Sanctions FinTech Companies Helping Users Evade Russia Sanctions

The Office of Foreign Assets Control sanctioned 13 entities and two people with ties to Russia’s financial services and technology industries for offering services to evade U.S. sanctions. OFAC said many of the companies operate blockchain-based services that allow virtual currency payments in Russia’s financial sector, “thus enabling potential sanctions evasion.”

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The designations target Timur Evgenyevich Bukanov, the owner and director of Obshchestvo S Ogranichennoy Otvetstvennostyu Tsentr Obrabotki Elektronnykh Platezhey, a Moscow-based fintech company that runs a virtual currency exchange. The exchange allows digital payments in rubles and virtual currencies to entities sanctioned by OFAC, including state-owned bank Sberbank, private Russian bank Alfa-Bank and Hydra Market, a Russian dark web marketplace.

The agency also designated Igor Veniaminovich Kaigorodov, the majority shareholder at both Obshchestvo S Ogranichennoy Otvetstvennostyu Veb3 Tekhnologii and Obshchestvo S Ogranichennoy Otvetstvennostyu Veb3 Integrator. Those Moscow technology companies offer “blockchain solutions” to Sberbank and others sanctioned by OFAC, the agency said.

The designations target other fintech companies, virtual currency exchanges, technology companies and other firms in Russia, Estonia and the United Arab Emirates that help users avoid U.S. financial restrictions. Brian Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, said Russia is “increasingly turning to alternative payment mechanisms” to evade sanctions, and the agency “will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system.”