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Ukraine Aims to Track Illegal Cryptocurrency Transactions with Assistance from the U.S. (Report)
The US IRS has allegedly offered specialized training to Ukrainian law enforcement agencies to assist in identifying unlawful cryptocurrency transactions conducted by Russian oligarchs and businesses.
Various organizations and specialists have contended that Russia might utilize digital currencies to circumvent sanctions (imposed by Western nations following the onset of the military conflict in Ukraine) or to finance war-related activities. Last year, the US Treasury Department sanctioned five cryptocurrency addresses associated with Task Force Rusich, a Russian paramilitary group responsible for atrocities against soldiers.
Combatting on the Economic Front
According to the Wall Street Journal, the US Internal Revenue Service (IRS) granted Ukraine licenses to utilize Chinalysis Reactor (an investigative tool that links cryptocurrency transactions to real-world entities) to track illicit activities conducted by Russians.
Ukrainian investigators have also received direct training from the American agency, potentially providing the war-affected nation with an advantage in its economic struggle against Russia.
“We resist the aggressor state not only on the battlefield but also on the economic front,” stated Eduard Fedorov – Acting Director of Ukraine’s Economic Security Bureau.
Another objective for the Ukrainian agencies is to disrupt Russian fundraising initiatives related to cryptocurrencies. Yurii Vykhodets, head of the cyber department of Ukraine’s National Police, remarked:
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“One key area is the identification and elimination of centers of support for occupation forces that raise funds for the purchase of things necessary for the war. We often see fundraising campaigns conducted with the use of cryptocurrency, as Russia believes in the possibility of circumventing sanctions by using virtual assets.”
Russia Should Avoid Crypto
Russia’s invasion of Ukraine in February last year (characterized as a “special military operation” by President Vladimir Putin) has led to significant sanctions against the largest country in the world by land area.
The USA, the European Union, Australia, and numerous others have enacted severe financial restrictions in an effort to halt the aggression and diminish Russia’s military capabilities.
Additionally, various agencies and notable figures have cautioned cryptocurrency firms to sever all connections with the aggressor, asserting that sanctioned oligarchs and entities might exploit digital currencies to evade penalties or finance war-related activities.
One notable example is Christine Lagarde, President of the European Central Bank, who indicated that entities engaging with Russia could face increased scrutiny.
The International Monetary Fund (IMF) has also weighed in, suggesting that the nation could mine bitcoin and altcoins to evade restrictions.
The United States Treasury Department added five cryptocurrency addresses to its sanctions blacklist in September last year. Notably, all of these were linked to Task Force Rusich: a “neo-Nazi paramilitary group” that has engaged in combat and committed severe crimes on Ukrainian soil.
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