Tracking Sanctions Evaders: IRS and Ukraine Join Forces
The Internal Revenue Service (IRS) is intensifying its efforts to track down individuals potentially using cryptocurrency to evade sanctions, particularly in the wake of Russia's invasion of Ukraine. The IRS's criminal investigation division is partnering with blockchain analytics firm Chainalysis and Ukrainian investigators in this effort.
The IRS is sponsoring Ukrainian investigators' access to Chainalysis tools to aid in cryptocurrency investigations. The agency has also provided training to Ukrainian law enforcement on tracing blockchain transactions, both virtually and in person.
"Sharing tools not only safeguards the US financial system, but the global economy," stated IRS Criminal Investigation Chief Jim Lee. This initiative is expected to enhance information sharing and case development between the US and Ukraine.
There have been warnings from regulators, central bankers, and policymakers that countries such as Russia and Iran might be using cryptocurrency to dodge international sanctions. Binance, the largest crypto exchange globally, is currently under investigation in the US over allegations of facilitating illegal access to its platform by Russians. In April last year, the US Treasury Department sanctioned BitRiver, a Switzerland-based Bitcoin miner, accusing it of assisting Russia in "monetizing its natural resources."
The IRS has been increasingly focusing on cryptocurrency in recent years, as it's seen as an avenue ripe for financial frauds like money laundering, market manipulation, and tax evasion. The agency was involved in several significant digital-asset seizures recently, including the record recovery of $3.6 billion worth of Bitcoin stolen in the 2016 hack of crypto exchange Bitfinex. In 2022 alone, the IRS seized approximately $7 billion worth of cryptocurrency, according to Lee.
Chainalysis, known for its blockchain analysis tools, data, and expertise, has previously collaborated with US agencies on multiple cases, including the seizure of over $1 billion in Bitcoin stolen from the notorious Silk Road darknet market.
"Sharing tools not only safeguards the US financial system, but the global economy," stated IRS Criminal Investigation Chief Jim Lee. This initiative is expected to enhance information sharing and case development between the US and Ukraine.
There have been warnings from regulators, central bankers, and policymakers that countries such as Russia and Iran might be using cryptocurrency to dodge international sanctions. Binance, the largest crypto exchange globally, is currently under investigation in the US over allegations of facilitating illegal access to its platform by Russians. In April last year, the US Treasury Department sanctioned BitRiver, a Switzerland-based Bitcoin miner, accusing it of assisting Russia in "monetizing its natural resources."
The IRS has been increasingly focusing on cryptocurrency in recent years, as it's seen as an avenue ripe for financial frauds like money laundering, market manipulation, and tax evasion. The agency was involved in several significant digital-asset seizures recently, including the record recovery of $3.6 billion worth of Bitcoin stolen in the 2016 hack of crypto exchange Bitfinex. In 2022 alone, the IRS seized approximately $7 billion worth of cryptocurrency, according to Lee.
Chainalysis, known for its blockchain analysis tools, data, and expertise, has previously collaborated with US agencies on multiple cases, including the seizure of over $1 billion in Bitcoin stolen from the notorious Silk Road darknet market.
