IRS Collaborates with International Organizations to Educate Ukrainian Officials on Addressing Cryptocurrency-Related Offenses

In a notable advancement in the fight against cybercrime and the enhancement of global security initiatives, the IRS Criminal Investigation (CI) has recently partnered with international agencies to deliver specialized training to Ukrainian law enforcement personnel.

The training concentrated on the complexities of cryptocurrency and blockchain tracing.

Enhancing Global Initiatives Against Crypto-Related Crime

Building on the earlier successful cyber training provided to Ukrainian law enforcement in May, the IRS Criminal Investigation (CI) collaborated with the Dutch Fiscal Information and Investigation Service (FIOD) and His Majesty’s Revenue and Customs (HMRC) from the UK.

They conducted a second training session from September 18th to 21st, aimed at assisting nearly 40 Ukrainian law enforcement officers in gaining a deeper understanding of cryptocurrency and blockchain tracing.

This online training equipped Ukrainian law enforcement with the necessary tools to combat money laundering, scrutinize fraudulent cryptocurrency transactions, and improve their capabilities in blockchain forensic investigations.

As stated in the official press release, the CI, FIOD, and HMRC worked alongside blockchain analytics companies CipherTrace and BlockTrace to facilitate the training.

The training included participants from various Ukrainian law enforcement bodies, such as the Cyber-Police Department of the National Police of Ukraine, the Economic Security Bureau of Ukraine, the Security Service of Ukraine, the National Anti-Corruption Bureau of Ukraine, and Ukraine’s State Bureau of Investigation.

After completing the training and successfully passing an examination, attendees received accreditation as Cryptocurrency Tracing Certified Examiners (CTCE).

CI Chief Jim Lee remarked in a statement,

“I regularly emphasize the significance of public-private partnerships, and the trainings we’ve provided to our Ukrainian law enforcement partners are tangible examples of how government entities and the private sector have united on a global scale to combat sanction evaders.”

In May 2023, in partnership with its collaborator and blockchain intelligence platform Chainalysis, CI conducted an initial round of cyber training for Ukrainian law enforcement. The main goal was to focus on identifying and dismantling the financial networks used by individuals attempting to conceal their assets in violation of sanctions.

Bypassing Sanctions

A year following the invasion of Ukraine, Russian military fundraising organizations have successfully raised millions of dollars in cryptocurrencies, despite US and international sanctions.

It was previously estimated that Russian military procurement and disinformation groups had gathered nearly $4.2 million, which is significantly less than Ukraine’s total of $212 million during the same timeframe. However, recent analysis by blockchain analytics firm Elliptic indicates that Russia may have accumulated as much as $20 million in cryptocurrencies.

Importantly, over half of these funds have originated from US-sanctioned entities, with more than 80% of the money transiting through centralized crypto exchanges. These entities have also engaged with decentralized finance (DeFi) protocols, NFT services, and decentralized exchanges.

Some individuals and groups have also turned to cryptocurrency for fundraising or incentives, even promoting NFT projects in support of the war effort.

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