CySEC Alarms against Use of Crypto Assets by Sanctioned Russians

The Cyprus Securities and Exchange Commission (CySEC) issued a notice on Tuesday, asking all regulated entities to be aware of sanction evasion attempts by flagged Russian individuals and entities. It is more concerned with the potential use of cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term in sanction evasion.

The latest notice came almost a month after the Cypriot financial market supervisor ordered all regulated entities to implement restrictive measures on Russia-related entities and individuals sanctioned by the European Union.

CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term primarily cited a paper published by the United States Financial Crimes Enforcement Network (FinCEN) that alerted financial institutions on various sanction evading attempts by Russians.

The paper, which was originally published on 7 March, highlighted the abuse of the financial system with corporate vehicles, shell companies and third parties to shield the identity of sanctioned persons.

Sanctioned Russian individuals and entities are even attempting to use convertible virtual currencies. These transactions are usually initiated from or sent to non-trusted Internet Protocol (IP) addresses mostly from locations in Russia and Belarus. These customers use exchanges or foreign-located Money Service Businesses (MSBs) in a high-risk jurisdiction with a poor anti-money laundering system in place.

Russian hackers are even hoarding funds with Ransomware attacks and other cybercrimes, transferring the ill-gotten proceeds to digital currency mixing services.

Concerned Regulators

Additionally, CySEC pointed out the warning of the United Kingdom financial regulators that clarified the use of crypto assets to evade is as illegal as the use of other regulated financial assets.

“Regulated entities are required to take steps/measures to reduce the risk of sanctions evasion via cryptoasset, including the implementation of additional sanctions, specific controls, as appropriate, and looking for red flag indicators that suggest an increased risk of sanctions evasion,” the regulator stated.

“CySEC urges Regulated Entities to be aware of these red flags… when implementing their due diligence measures, especially for ongoing monitoring of accounts and transactions.”