The Office of Foreign Assets Control (OFAC) of the Treasury Department of the United States has imposed sanctions on three crypto exchanges used by Russian darknet markets and Banks.
The first exchange affected by the sanctions is the Bitpapa IC FZC, LLC, a peer-to-peer virtual currency exchange aimed at Russian citizens. According to the Authorities, has been used for millions of dollars in transactions by two Russian entities (Hydra Market and Garantex).
The second is the Obshchestvo S Ogranichennoy Otvetstvennostyu Tsentr Obrabotki Elektronnykh Platezhey (TOEP), a virtual currency exchange, operating as Netexchange and Netex24, and had been used by Hydra Market Sberbank, Alfa-Bank and Hydra Market.
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Hydra Market was the largest darknet market in the world, based in Russia, and were used for selling drugs and money laundering. In 2020, it had 19,000 registered accounts and served at least 17 million customers worldwide. It also offered stolen databases, forged documents and hacking-for-hire services. In April 2022, the German police seized the servers of Hydra Market along with the United States. They also managed to seize 543 bitcoins from its profits (currently worth about $38.5 million).
The third crypto exchange affected by the sanctions of the USA, is the Crypto Explorer DMCC (AWEX) which operates in Russia and the United Arab Emirates and facilitates conversions between virtual currencies, rubles and UAE dirhams. AWEX also provides cash services in Moscow and Dubai, allowing people to Clients to load funds onto the credit cards of Sberbank and Alfa-Bank, two Russian banks.
The US imposed sanctions on the above crypto exchanges for their participation in the financial services sector of the Russian Federation.
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"Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to finance its war against Ukraine“, stated ο Brian E. Nelson, Minister of State for Terrorism and Financial Intelligence.
“As the Kremlin seeks to leverage entities in the financial technology space, the Treasury Department will continue to expose and disrupt the companies helping Russian financial institutions to reconnect with the global financial system".
Following the new sanctions, all assets and liabilities of the Data and interests in the United States associated with designated persons and entities will be engaged.
Those who deal with sanctioned entities and individuals will also be at risk of sanctions.
OFAC and penalties
OFAC is a division of the U.S. Department of the Treasury, responsible for implementation and enforcement of economic and trade sanctions of the USA. These sanctions can be against countries, organizations or persons considered to be a threat to the national security, economy or politics of the country.
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OFAC is also responsible for monitoring the activities of sanctioned individuals and organisations and shall take steps to ensure that they have not Accessed at in the American economic system.
Finally, OFAC offers guidance and training for organisations and individuals for understanding and complying with the sanctions.
Source : www.bleepingcomputer.com
