IRS, Chainalysis, and Ukraine Collaborate to Track Sanction-Evading Russians via Cryptocurrencies
The criminal investigation division of the United States Internal Revenue Service (IRS) has announced a step-up in its collaboration with international counterparts to identify individuals and entities evading Western sanctions. As part of these efforts, the agency is working with Chainalysis, a blockchain forensics firm, and Ukrainian investigators to track Russians who may be using cryptocurrencies to hide their assets amidst financial restrictions imposed due to Moscow's invasion of Ukraine.
According to a report from Bloomberg, the IRS is sponsoring Ukraine's access to a Chainalysis tool that facilitates investigations related to cryptocurrencies. Additionally, the agency has organized training sessions, both virtual and in-person, for Ukrainian law enforcement, with the goal of enhancing their ability to trace blockchain transactions.
The aim of these initiatives is to improve information sharing and case development between the United States and Ukraine, as explained in a statement by the IRS. Jim Lee, the Chief of IRS Criminal Investigation, highlighted the importance of sharing tools to safeguard not only the U.S. financial system, but also the global economy.
Authorities worldwide have issued warnings about sanctioned countries like Russia and Iran potentially using cryptocurrencies to circumvent international restrictions. In a recent report, Bloomberg revealed that Binance, the world's largest cryptocurrency exchange, is under investigation by the U.S. Justice Department for suspected violations of Russian sanctions.
Michael Gronager, co-founder and CEO of Chainalysis, mentioned that although cryptocurrencies are still too illiquid to support widespread evasion of sanctions, smaller-scale evasion does occur. Efforts are underway to determine the extent of Russian oligarch money flowing through Ukraine. Gronager also stated that cryptocurrency is playing an unprecedented role in the war, with donations supporting each side. For instance, around 5 million USD have been transferred to approximately 100 pro-Russia groups through cryptocurrencies over the past year. Meanwhile, research in March indicated that most crypto assets sent from wallets supporting Russia end up on centralized exchanges.
Apart from these developments, Ukraine and the United States have collaborated on other crypto-related fronts. The Ukrainian police, with support from U.S. law enforcement, recently disrupted a network of crypto exchange services suspected of laundering criminal proceeds from ransomware attacks and fraud schemes. Nine such platforms were shut down in May as a result of this joint effort.
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The criminal investigation division of the United States Internal Revenue Service (IRS) has announced a step-up in its collaboration with international counterparts to identify individuals and entities evading Western sanctions. As part of these efforts, the agency is working with Chainalysis, a blockchain forensics firm, and Ukrainian investigators to track Russians who may be using cryptocurrencies to hide their assets amidst financial restrictions imposed due to Moscow's invasion of Ukraine.
According to a report from Bloomberg, the IRS is sponsoring Ukraine's access to a Chainalysis tool that facilitates investigations related to cryptocurrencies. Additionally, the agency has organized training sessions, both virtual and in-person, for Ukrainian law enforcement, with the goal of enhancing their ability to trace blockchain transactions.
The aim of these initiatives is to improve information sharing and case development between the United States and Ukraine, as explained in a statement by the IRS. Jim Lee, the Chief of IRS Criminal Investigation, highlighted the importance of sharing tools to safeguard not only the U.S. financial system, but also the global economy.
Authorities worldwide have issued warnings about sanctioned countries like Russia and Iran potentially using cryptocurrencies to circumvent international restrictions. In a recent report, Bloomberg revealed that Binance, the world's largest cryptocurrency exchange, is under investigation by the U.S. Justice Department for suspected violations of Russian sanctions.
Michael Gronager, co-founder and CEO of Chainalysis, mentioned that although cryptocurrencies are still too illiquid to support widespread evasion of sanctions, smaller-scale evasion does occur. Efforts are underway to determine the extent of Russian oligarch money flowing through Ukraine. Gronager also stated that cryptocurrency is playing an unprecedented role in the war, with donations supporting each side. For instance, around 5 million USD have been transferred to approximately 100 pro-Russia groups through cryptocurrencies over the past year. Meanwhile, research in March indicated that most crypto assets sent from wallets supporting Russia end up on centralized exchanges.
Apart from these developments, Ukraine and the United States have collaborated on other crypto-related fronts. The Ukrainian police, with support from U.S. law enforcement, recently disrupted a network of crypto exchange services suspected of laundering criminal proceeds from ransomware attacks and fraud schemes. Nine such platforms were shut down in May as a result of this joint effort.
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