U.S. Helps Ukraine Identify Russian Crypto Sanctions Evaders

  • The U.S. Internal Revenue Service is helping Ukrainian law enforcement to pursue Russian crypto sanctions evaders. 
  • Chainalysis is collaborating with agencies from both nations to track individuals suspected of concealing their wealth using crypto. 
  • Regulators and policymakers in the US have highlighted the potential role of crypto in sanctions evasion and money laundering. 

The United States Internal Revenue Service (IRS) has collaborated with blockchain intelligence firm Chainalysis to guide and train law enforcement agencies in Ukraine to carry out investigations and identify those evading crypto sanctions imposed on Russia. News of the international collaboration comes more than a year after Ukraine was invaded by Russia, prompting high-profile Russian nationals to scramble to conceal their assets. 

The U.S. Is Sponsoring Crypto Investigation Tool For Ukraine

According to a report by the Wall Street Journal, Ukrainian law enforcement agencies and investigators will be part of a week-long training camp that will be held in Frankfurt, Germany. The Internal Revenue Service’s criminal investigation division will provide advanced, in-person training to Ukrainian investigators which will help them track down illicit crypto transactions and financial networks used by sanctioned entities in Russia. 

The IRS has been playing an active role in probing potential violations of sanctions imposed in Russia since it invaded Ukraine in February last year. The tax agency is reportedly involved in 23 sanctions-related investigations at the moment. As part of the collaboration with Ukraine, the IRS will provide cyber training to the country’s National Police, the Economic Security Bureau, the Security Service, and the Prosecutor General’s Office.

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.”

The IRS has revealed that it sponsored Ukraine’s use of Chainalysis Reactor, a crypto investigation tool designed by the blockchain intelligence firm. The agency has provided Ukrainian authorities with licenses to use the product, which will aid in the tracking and identification of those attempting to circumvent Russian sanctions. The collaboration comes in light of multiple warnings issued by regulators and policymakers in the U.S. regarding sanction evasions and money laundering by Russian nationals.

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