- Financial institutions support the U.S and international efforts to weaken Russia.
- Russian government using CVCs to evade widespread sanctions.
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, and the Financial Crimes Enforcement Network (FinCEN), issued an alert. That warning financial institutions to be on the watchful for attempts by people or organizations to prevent BIS export controls set up, in response to the Russian Federation’s ongoing invasion of Ukraine.
Since the Ukraine invasion, Russia’s financial options are down to restrictions and the country started seeking a financial solution with cryptocurrency. As a result of being cut off from the SWIFT financial network and having its major banks listed on sanctions lists. US and EU politicians have also raised concerns about the possibility of Russia using cryptocurrency assets.
FinCEN Advice on Cryptocurrency
FinCEN advised US-based financial institutions with visibility into cryptocurrencies and convertible digital currency (CVC) to notify any activity that would be considered a potential way for Russia to get over sanctions implemented by the US and its allies.
Financial institutions were required to report such moves from Russian and Belarusian individuals named in operations that many have called financial warfare. Even though the US watchdog claimed that the Russian government using CVCs to evade widespread sanctions was not feasible.
Some US firms and lawmakers have expressed concern about the possibility that individuals and banks with connections to Russia are attempting to utilize cryptocurrencies to get around the sanctions announced by President Joe Biden announced on February.
During the same period, the Treasury Division’s Office of International Belongings Management, the organization in charge of managing and enforcing US sanctions, issued a warning to US citizens not to utilize digital currencies to benefit Russia’s government or main banking institution.