US lobs fresh round of sanctions against bitcoin miner and others helping Russia evade penalties

The US Treasury Department announced Wednesday that it expanded its wide raft of sanctions to include businesses and individuals that are helping Russia evade the impact of economic penalties imposed on Moscow.

Treasury officials said the department is now targeting Russian commercial bank Transkapitalbank, as well as a network of more than 40 people including oligarch Konstantin Malofeyev it believes are helping the Kremlin skirt a wave of economic punishments.

The Biden administration also said it’s cracking down on companies operating in Russia’s virtual currency mining industry, including Bitriver, that help the country monetize its exports and other natural resources.

“Treasury can and will target those who evade, attempt to evade, or aid the evasion of US sanctions against Russia, as they are helping support Putin’s brutal war of choice,” Under Secretary for Terrorism and Financial Intelligence Brian Nelson said in a press release .

“The United States will work to ensure that the sanctions we have imposed, in close coordination with our international partners, degrade the Kremlin’s ability to project power and fund its invasion,” he added.

As a Russian, privately owned bank, Transkapitalbank has offered to help Moscow avoid detection and sanctions-derived restrictions through a proprietary internet-based banking system, known as TKB Business, the Treasury Department said in a statement announcing the penalties.

That system, Treasury officials said, is an alternative communication channel to the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, network. It’s also designed to process US dollar payments for sanctioned clients.

Earlier this year, the US, European Union, Canada and UK cut a handful of Russian banks off the SWIFT financial networkone of Washington’s most powerful moves to date to isolate Russian from the global marketplace and cripple its economy.

That move effectively prevented Russia from communicating securely with banks beyond its borders.

Treasury also said that it is stepping up its efforts to quash a global “sanctions evasion and malign influence” network led by Russian oligarch Malofeyev.

Malofeyev was first targeted by the US back in 2014 for his role in activities that “threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine.” At that time, the Office of Foreign Assets Control noted that Malofeyev was one of the main sources of financing for Russians promoting separatism in Crimea.

“In recent years,” Treasury said Wednesday, “Malofeyev, covertly or through intermediaries, supported pro-Russian activities that undermine democracy, interfere in elections, and degrade security and stability in a host of countries.”

The announcement also represents the Biden administration’s first-ever attempt to jab Russia’s virtual currency mining industry.

Among the companies targeted by US sanctions is Bitriver, a company founded in 2017 that operates its mining facilities with hydroelectric power.

The Office of Foreign Assets Control named 10 Russia-based subsidiaries of Bitriver in its latest wave of sanctions.

“Russia has a comparative advantage in crypto mining due to energy resources and a cold climate,” Treasury officials said Wednesday. “However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions.”

“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,” they added.

— CNBC’s MacKenzie Sigalos contributed to this report.


Leave a Reply

Your email address will not be published. Required fields are marked *