Crypto Crime Fighters Unleashed: IRS And Ukraine Join Forces To Hunt Down Hidden Russian Assets

In a bid to combat sanctions evasion using cryptocurrency, the IRS criminal investigation division has announced its collaboration with blockchain analytics firm Chainalysis and Ukrainian investigators.

The joint effort aims to identify Russian individuals who might be using digital assets to hide their wealth in the aftermath of Russia's invasion of Ukraine.

As part of the collaboration, the IRS is sponsoring Ukrainian investigators' access to a specialized tool provided by Chainalysis, which assists in conducting crypto-related investigations.

Additionally, the agency is conducting virtual and in-person training sessions for Ukrainian law enforcement to enhance their skills in tracing blockchain transactions.

Bloomberg quoted Jim Lee, Chief of IRS Criminal Investigation, saying, "Sharing tools not only safeguards the US financial system, but the global economy."

The collaborative efforts between the US and Ukraine are expected to improve case development and information exchange in tracking sanctions evaders.

Concerns have been raised by regulators, central bankers, and policymakers about the potential misuse of cryptocurrencies by countries like Russia and Iran to evade international sanctions.

Binance, the world's largest cryptocurrency exchange, is currently under investigation by US authorities over allegations of enabling illegal access to its platform by Russian individuals.

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Last year, the US Treasury Department imposed sanctions on BitRiver, a Switzerland-based Bitcoin miner, accusing it of assisting Russia in "monetizing its natural resources."

The IRS has been increasingly focusing on cryptocurrency-related financial crimes such as money laundering, market manipulation, and tax evasion.

Notably, the agency has played a significant role in high-profile digital asset seizures, including the recovery of $3.6 billion worth of Bitcoin stolen in the Bitfinex hack of 2016.

According to Lee, the IRS criminal unit seized around $7 billion worth of cryptocurrency in 2022.

Presently, the unit is actively investigating 23 cases related to sanctions evasion.

Chainalysis, a prominent provider of blockchain analysis tools and data, has previously collaborated with US agencies on various cases, including the recovery of over $1 billion in Bitcoin stolen from the notorious Silk Road darknet market.

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