This article explores how, based on recent cases, US officials' concern about the potential misuse of cryptocurrency to evade sanctions against Russia in the war in Ukraine is warranted. However, any such endeavors by the Russians would carry a high risk for potential detection. Transactions on blockchains are visible to all and thus traceable even if the identities behind public wallets are private in the first instance; additionally, the records of transactions are immutable and saved forever.
Forensic tools increasingly available to law enforcement as well as crypto-enterprises can potentially detect and stop proposed transactions with potentially sanctioned persons on a real-time basis. Laundering money in plain sight is typically not a preferred method.
Globally, more and more entities involved in facilitating cryptocurrency transactions are expressly required to apply traditional anti-money laundering (AML) measures, including customer-identity verification, transactions monitoring, and suspicious activity reports, and are fully adhering to all sanctions requirements.
"Crypto Misuse — Evading Russian Sanctions Can Be Detected, Prosecuted," Bloomberg Law, March 15, 2022
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