News
OFAC sanctions employee of Russian state-owned gold producer for crypto money laundering
The US Treasury has sanctioned a Russian national working at Polyus, Russia’s largest state-owned gold producer, for his involvement in a complex cryptocurrency laundering scheme.
The US Department of the Treasury on January 12 announcement another set of sanctions against 300 individuals and entities to “restrict the ability” of Russia’s military-industrial base to “profit from certain American software and information technology” as the country “completes its transition to a war economy total”.
As note by the company Intel Blockchain TRM Laboratoriesthe Foreign Assets Control Office (OFAC) also targeted Russian national Andrey Sudakov, who appears to be an employee of Russian state-owned gold producer Polyus, designated by the United States, alongside his Hong Kong-based associate Mu Xiaolu, for involvement in a “complex, multi-layered laundering scheme in which payments from Russian-originated gold sales were converted into fiat currency and cryptocurrencies through numerous shell companies based in the Arab Emirates united and in Hong Kong.
VPower announces blockchain-based service | Source: TRM Laboratories
The Treasury press release stated that Hong Kong-based VPower Finance Security Hong Kong Limited was involved in the transportation of the gold of Russian origin. TRM Labs noted that VPower also offers blockchain-based logistics services, allowing customers to “personalize the collection and delivery of valuable items through a mobile app.” It remains unclear whether VPower’s crypto-related services were involved in the scheme mentioned by OFAC.
TRM Labs pointed out that the laundering patterns observed in this case are consistent with patterns observed by the company, such as Chinese electronics manufacturers “used for Russia’s war effort, including Chinese companies shipping parts in Russia, the involvement of Chinese intermediaries, coordination between the Russians and the Chinese.” logistics companies and Russian cryptocurrency traders facilitating payments to businesses in China.
“By increasing the risk of sanctions for foreign financial institutions and restricting access to critical technologies, the United States and its allies intend to diminish Russia’s ability to continue its aggression against Ukraine.”
TRM Laboratories
This decision is part of a series of sanctions aimed at limiting Russia’s military capabilities. At the beginning of May, OFAC sanctioned Russian unmanned aerial vehicle (UAV) developer OKO Design Bureau allegedly operated a Telegram channel soliciting cryptocurrency donations, according to blockchain investigation firm Chainalysis.