FinCEN issued an alert on Monday advising increased vigilance against attempts to evade Russian sanctions using cryptocurrencies and other virtual currencies.
The alert listed red flags to assist in identifying suspected sanctions evasion activity. It also reminded financial institutions of their obligations under the Bank Secrecy Act, including reporting transactions related to convertible virtual currencies, a term FinCEN uses that embraces cryptocurrencies and other digital assets.
FinCEN said in the alert that it was critical that “all financial institutions, including those with visibility into CVC flows, such as CVC exchangers and administrators, [...] identify and quickly report suspicious activity associated with potential sanctions evasion.”
The agency acknowledged that “large scale sanctions evasion using CVC by a government such as the Russian Federation is not necessarily practicable,” but that “financial institutions may observe attempted or completed transactions tied to CVC wallets or other CVC activity” tied to sanctioned Russian and Belarusian individuals or entities.
“Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,” FinCEN acting director Him Das said in a press release.
The FinCEN alert came less than a week after Senate Democrats drafted a letter to the Treasury inquiring about the steps the department was taking to ensure that cryptocurrencies are not used to bypass Russian economic sections, with concerns mounting after large crypto exchanges resisted a blanket ban on Russian users.
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