Russian sanctions target cryptocurrency miners

The US imposed new sanctions on Wednesday against over 40 individuals and entities accused of evading ongoing sanctions against Russia for its invasion of Ukraine.

Sanctions against a cryptocurrency mining firm are part of the war.

Transkapitalbank, a Chinese and Middle Eastern bank, was sanctioned by the Treasury Department.

By providing an alternative communication channel to SWIFT, the U.S. claims that Transkapitalbank has helped sanctioned clients process dollar payments.

The Treasury also targeted Russian oligarch Konstantin Malofeyev, founder of Russian Orthodox news channel Tsargrad TV.

Malofeyev was sanctioned in December 2014. The Treasury said he was a major funder of Russian separatists in Crimea.

In first, the US government sanctioned a cryptocurrency mining firm for its role in the war.

Treasury’s Office of Foreign Assets Control sanctioned Bitriver AG and ten of its subsidiaries on Wednesday.

“The United States is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions,” Treasury said in a statement.

Congressmen and administration officials have expressed concern that Russia is using cryptocurrency to avoid the recent avalanche of sanctions imposed on banks, oligarchs, and the energy industry.

Experts say Russia will have to rely more on cryptocurrency to support its financial transactions, but Treasury officials deny that cryptocurrency is a major driver of sanctions evasion.

Inca Digital CEO Adam Zarazinski says that oligarchs and sanctioned individuals find ways to offload their money to avoid sanctions’ impacts.

He added that the sanctions may not have the impact the US hopes because, despite being sanctioned by the US, Bitriver can still do business because it can no longer interact with the US financial system.

“Russia’s invasion is an assault on fundamental international rules and norms and threatens the core of the international order,” said Treasury Secretary Janet Yellen shortly after the sanctions were announced.

“The United States stands resolutely with the Ukrainian government and the Ukrainian people.”

The statement was issued in conjunction with the International Monetary Fund and World Bank spring meetings.

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