Sanctions on Russian Cryptocurrency Companies

The US Treasury Department has imposed sanctions on Russian cryptocurrency companies in another move aimed at limiting Russia's ability to evade international sanctions in connection with its actions in Ukraine.

The Office of Foreign Assets Control (OFAC) of the US Treasury Department identified 13 entities and two individuals subject to the latest round of sanctions. The aim of these actions is to block Russia's key financial infrastructure to prevent it from using the international financial system to pursue aggressive wartime goals in Ukraine.

Among the companies sanctioned is Atomyze, a fintech company controlled by Russian billionaire Vladimir Potanin's Interros Holding investment group. Atomyze was penalized for its involvement in tokenizing precious metals and diamonds for Russian firms and for its collaboration with sanctioned Russian banks Rosbank and Sovcombank. The company obtained Russia's first government license for issuing and exchanging digital financial assets in February 2022, just three weeks before the Russian invasion of Ukraine. In July of the same year, Atomyze launched the first digital token backed by palladium produced by Nornickel, a sanctioned metal producer also controlled by Potanin.

Other sanctioned companies include Lighthouse, a fintech firm that conducted the first cash-backed digital asset transaction in June 2022. The US Treasury Department stated that Lighthouse collaborated with the sanctioned Russian central bank and major sanctioned lenders VTB and Sberbank.

OFAC-imposed sanctions also target other financial technology firms such as B-Crypto, Masterchain, and Veb3 Technology. Typically, these sanctions prohibit transactions in US dollars by the affected companies and the use of the US financial system. These actions aim to exert pressure on Russia by impeding its access to international financial and technological markets.