The US Treasury’s Office of Foreign Assets Control (OFAC) took action against a developer at OKO Design Bureau on May 1, a Russia-based drone maker. OFAC sanctioned the developer and added three crypto addresses associated with the firm to the Specially Designated Nationals (SDN) list.
According to OFAC’s press release, the OKO Design Bureau developer is one of the 300 individuals and entities sanctioned to limit Russia’s access to the global financial system and disrupt its influence in the war against Ukraine, as the country is reportedly using cryptocurrency to evade sanctions imposed by the US and others.
OFAC Sanctions Reveals Crypto Addresses Are Used to Solicit Donations
Treasury is taking action to further degrade Russia’s ability to sustain its illegal war against Ukraine. Almost 300 targets are being sanctioned by both Treasury and @statedept for enabling Russia’s acquisition of technology and equipment from abroad. https://t.co/v7K7CzUEqP
— Treasury Department (@USTreasury) May 1, 2024
A report by blockchain investigator Chainalysis revealed that OKO Design Bureau operated a Telegram channel to solicit crypto donations. This channel provided detailed descriptions and videos of its operations, including testing with the Russian Ministry of Defense and deploying unmanned aerial vehicles (UAVs) against Ukraine.
Despite these efforts, OKO Design Bureau’s crypto donation collection amounted to less than $1,000, indicating limited success in fundraising through cryptocurrency.
Interestingly, the sanctioned Russian drone maker case is not isolated, as Chainalysis highlighted that several Russian militia groups explicitly used crypto addresses and donations to fund and drive their war efforts.
In response to these developments, Secretary of the Treasury Janet L. Yellen emphasized that OFAC sanctions on crypto addresses would disrupt Russia’s war strategies.
“Today’s actions will further disrupt and degrade Russia’s war efforts by going after its military-industrial base and the evasion networks that help supply it,” Yellen stated.
OFAC sanctions on crypto addresses reflect ongoing efforts to combat crypto-related and non-crypto-related crimes from Russia. The US financial watchdog seeks to halt Russia’s ability to finance and sustain its military operations by targeting entities like OKO Design Bureau and its financial networks.
OFAC Sanctions on Crypto Addresses Heats Up
In recent years, individuals and entities seeking to evade sanctions imposed by the OFAC have turned to cryptocurrency due to its anonymity.
On March 27, the OFAC, in collaboration with the UK’s Office of Foreign Sanctions Implementation (OFSI), sanctioned two individuals and three entities involved in fundraising for Hamas following attacks on Israel.
One of the entities, Gaza Now, a Gaza-based news outlet, was found to have posted pro-Hamas content, solicited donations for the organization, and accepted funds in cryptocurrency. OFAC and OFSI identified several cryptocurrency addresses associated with Gaza Now, which had received approximately $4.5 million in crypto donations.
This was around the time that the US sanctioned Hezbollah crypto funding operator, who was linked to terrorism financing in the Middle East.
Meanwhile, Chainalysis reported that between February 2021 and February 2023, Russian militia groups had received nearly $5.4 million in cryptocurrency donations.
It could be recalled that the OFAC sanctions list became active in 2018 and has continued to investigate and prohibit crypto and non-crypto-related crimes, developers, and companies tied in suspicious programs.