The United States Department of Justice could bring a criminal case against a citizen of the United States who may have violated sanctions by using cryptocurrency.
A Friday opinion filed in the U.S. District Court for District of Columbia states that the unnamed individual, who is currently the subject of a criminal investigation from the Justice Department, allegedly sent more $10 million in Bitcoin (BTC), from a U.S. crypto exchange to an exchange in a nation for which the U.S. currently imposes sanction — suggesting Russia, North Korea and Syria. According to the filing, the accused “conspired against the International Emergency Economic Powers Act” as well as conspired for the defrauding of the United States.
According to the filing, the individual “proudly stated that the Payments Platform could bypass U.S. Sanctions” by using BTC and knew of the sanctions against the country. According to the filing, the U.S.-based cryptocurrency exchange had access to user information via Know Your Customer compliance policies.
In his opinion, Magistrate Judge Zia Faruqui stated that the Department of Justice has the power to criminally prosecute individuals or entities who fail to comply [Office of Foreign Assets Control] regulations. “Prohibited financial service includes any transfer of funds […] directly or indirectly from the U.S., or by a U.S. entity, wherever located to the sanctioned entity/country. Virtual currency exchanges are included in financial service providers, just in case you were wondering.
“The question is not whether virtual currency will be around forever (i.e. FUD), but rather whether fiat currency regulations can keep up with frictionless, transparent payments on blockchain.”
Related: US Treasury Dept sanctions 3 Ethereum addresses that are allegedly connected to North Korea
The United States’ sanctions are administered by the Office of Foreign Assets Control (Treasury Department). The government office issued a warning to U.S. citizens following Russia’s military invasion of Ukraine. It also added the Russian-based darknet market Hydra, BitRiver crypto mining services provider BitRiver and Garantex digital currency exchange Garantex, to its “Specially Designated Nats” list. This designation generally prevents Americans from doing business in their country.