It’s sanctions central at the US Treasury this week as a further 15 are slapped on organizations and individuals in Russia.
The Treasury’s Office of Foreign Assets Control (OFAC) designated 13 organizations and two individuals – all concerning financial services organizations, including cryptocurrency exchanges that offered services to already-sanctioned dark web marketplaces in Russia, and those who helped run them.
Five of the 13 freshly designated entities were also controlled by individuals who were already sanctioned. The latest round of trade restrictions were placed on those who are believed to have helped evade existing US sanctions.
“Many of the individuals and entities designated today facilitated transactions or offered other services that helped OFAC-designated entities evade sanctions,” an OFAC statement read.
“These designations build upon OFAC’s February 23, 2024 action to target companies servicing Russia’s core financial infrastructure and curtail Russia’s use of the international financial system to further its war against Ukraine.”
They follow the initial seven sanctions announced on Monday, all relating to Chinese nationals and members of Beijing’s APT31 offensive cyber outfit.
Three companies that operated cryptocurrency exchanges were added to the list: Netexchange aka Netex24, Bitpapa, and Crypto Explorer.
Netex24 and Bitpapa both operated exchanges and enabled digital payments for Hydra Market, among others. At its peak, US-sanctioned Hydra was the most popular dark web marketplace until it was shuttered by law enforcement in April 2022.
Bitpapa also has business dealings with Garantex, a Moscow-based crypto exchange that’s facilitated transactions for ransomware scumbags like Conti.
Both Netex24 and Bitpapa are used primarily by dark web markets or other sanctioned entities, research from blockchain data company Chainalysis shows.
Looking at outflows from both exchanges over a multi-year period, 46.7 percent of Netex24’s transactions were to dark web marketplaces and 23.4 percent to otherwise sanctioned entities.
Similarly, 52 percent of transactions flowing out of Bitpapa were to sanctioned entities, and a further 32.6 percent were to dark web marketplaces.
Timur Evgenyevich Bukanov, one of two individuals included in the round of sanctions, was the owner of Netex24 and is now designated for operating financial services in the Russian economy.
Igor Veniaminovich Kaigorodov, the other individual, was designated for operating a tech company that contributed to the Russian economy. He’s the majority shareholder at Veb3 Tekhnologii and Veb3 Integrator – two Moscow-based blockchain providers that have previously worked with sanctioned banks Sberbank and Alfa-Bank.
Other finance companies caught up in the latest sanctions that also worked with already designated banks include Masterchain, Laitkhaus, Atomaiz, B-Crypto, and Tokentrust Holdings – an entity that’s also the majority shareholder in Tokentrust.
The list was completed by Bitfingroup, a company that lists Bukanov as its sole owner, and OOO Kripto Eksplorer, a company that lists Crypto Explorer as its sole owner.
“Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to fund its war against Ukraine,” said Brian E Nelson, under secretary of the Treasury for terrorism and financial intelligence.
“As the Kremlin seeks to leverage entities in the financial technology space, Treasury will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system.” ®