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G7 outlines ways to ensure Russia can’t use crypto to evade sanctions

G7 outlines ways to ensure Russia can’t use crypto to evade sanctions

Last updated 29th Jun 2022
Disclosure
  • U.S. Treasury Department is monitoring any efforts to circumvent or violate Russia-related sanctions
  • G7 will impose financial penalties on Russians using digital assets to increase and transfer wealth

The Group of Seven (G7) countries, consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, issued a joint statement that they would “ensure that the Russian state and elites, proxies and oligarchs cannot leverage digital assets as a means of evading or offsetting the impact of international sanctions,” world media reported.

At the same time, the U.S. Treasury Department is “closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currency.”

G7 measures ‘severely compromised’ Russian economy

On Friday, G7 leaders issued a joint statement on further sanctions on Russia. According to the statement, the countries have imposed expansive, restrictive measures that have severely compromised Russia’s economy and financial system since Russian President Vladimir Putin launched an invasion of Ukraine on Feb. 24.

Maintaining effectiveness

The G7 countries confirmed their commitment to maintaining the effectiveness of their restrictive measures, cracking down on evasion, and eliminating loopholes.

The joint statement reads:

Specifically, in addition to other measures planned to prevent evasion, we will ensure that the Russian state and elites, proxies and oligarchs cannot leverage digital assets as a means of evading or offsetting the impact of international sanctions.

G7 leaders pointed out that this would limit their access to the global financial system further, pointing out that the fact their current sanctions already cover crypto assets is commonly understood.

The statement goes on to say that G7 commits to taking measures to identify and ban any illicit activity. G7 will impose financial penalties on efforts by Russians to use digital assets to increase and transfer their wealth in line with their respective national processes.

US Treasury monitoring crypto sector

The U.S. Treasury’s OFAC (Office of Foreign Assets Control) issued guidance to prevent potential attempts to use digital currency to evade U.S. sanctions imposed on Russia. The guidelines draw attention to the fact that all U.S. persons have to comply with OFAC regulations, irrespective of whether a transaction is denominated in virtual or traditional fiat currency.

The guidelines state:

U.S. persons, wherever located, including firms that process virtual currency transactions, must be vigilant against attempts to circumvent OFAC regulations and must take risk-based steps to ensure they do not engage in prohibited transactions.

OFAC is committed to applying its broad enforcement privileges to ensure compliance and act against violations.

Daniela Kirova

Daniela Kirova

Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.