In the first case of its sort, the US government plans to accuse an unnamed individual of knowingly utilising crypto to evade sanctions. According to an opinion made by the case’s judge, the government is pressing charges against an unidentified defendant for running an internet payment network in a sanctioned nation. Some of these transactions included cryptocurrencies such as Bitcoin.
The court document notes:
“The Payments Platform advertised its services as designed to evade U.S. sanctions, including through purportedly untraceable virtual currency transactions.”
The defendant opened an account with a crypto exchange situated in the US to purchase and sell Bitcoin. Then they transferred thousands of dollars to two additional accounts at international exchanges. In the end, the defendant utilised those two accounts to send almost $10 million in Bitcoin between the US and an undisclosed sanctioned nation.
The defendant did not try to disguise the fact that his service escaped penalties because he believed bitcoin was untraceable. “Proudly stating the Payments Platform could avoid US sanctions,” they said instead. The defendant’s identity was linked to the payment site by investigators.
According to the International Emergency Economic Powers Act (IEEPA), the defendant’s actions are considered unlawful and fraudulent. Their actions also violate the fines and regulations of the Office of Foreign Assets Control (OFAC).
It’s unknown which sanctioned countries are being investigated. Venezuela, Syria, North Korea, Cuba, Iran,and (arguably) Russia are the only countries targeted by US sanctions.
Though this is the first case in the United States specifically connected to the use of cryptocurrencies to escape sanctions, prosecutors have previously investigated other cryptocurrency-related offences.
