IRS Working With Ukraine to Track Russian Crypto Sanctions Evaders

2023-05-11 23:17

The IRS criminal investigation division is ramping up collaboration with counterparts overseas in pursuit of sanctions evaders. The

The IRS criminal investigation division is ramping up collaboration with counterparts overseas in pursuit of sanctions evaders. The agency said it is working with blockchain analytics firm Chainalysis and with Ukrainian investigators to track Russian individuals who might be using cryptocurrency to conceal their assets in the aftermath of Russia’s invasion of Ukraine.

The agency is sponsoring Ukrainian investigators’ access to a Chainalysis tool that aides crypto probes. It has also offered both virtual and in-person training sessions on tracing blockchain transactions to Ukrainian law enforcement.

Read: Yellen Urged to Ensure Crypto Isn’t Russia Sanctions Workaround

“Sharing tools not only safeguards the US financial system, but the global economy,” IRS Criminal Investigation Chief Jim Lee said in a statement. The efforts are expected to improve information-sharing and case development between the US and Ukraine, the IRS said.

Regulators, central bankers and policy makers have warned that countries including Russia and Iran may be using crypto to evade international sanctions. Binance, the world’s largest crypto exchange, is facing a US probe over whether it allowed Russians to illegally access its platform. Last April, the US Treasury Department imposed sanctions on a Switzerland-based Bitcoin miner called BitRiver, accusing it of helping Russia “monetize its natural resources.”

Read: Binance Faces US Probe of Possible Russian Sanctions Violations

In recent years, IRS criminal investigators have increased their focus on crypto, saying it’s ripe for financial frauds like money laundering, market manipulation and tax evasion. The agency has also been involved in several of the largest recent digital-asset seizures, including the record recovery of $3.6 billion worth of Bitcoin stolen during the 2016 hack of crypto exchange Bitfinex. The unit seized around $7 billion worth of crypto in 2022, according to comments from Lee last year. The IRS criminal unit said it currently has 23 ongoing sanctions-related probes.

Chainalysis, which sells blockchain analysis tools, expertise and data to clients in both government and the private sector, has worked with US agencies on a number of cases including the seizure of more than $1 billion in Bitcoin stolen from the infamous Silk Road darknet market. Its backers include Singapore’s GIC sovereign wealth fund, Bank of New York Mellon and Blackstone, the company said in a blog post announcing a $170 million Series F financing last year.