The U.S. imposed sanctions on 13 Russia-linked fintech companies and two individuals for offering cryptocurrency services used to evade economic restrictions imposed on Russia following its invasion of Ukraine.

The U.S. Treasury Department's new spate of sanctions comes two weeks after Russia announced that it had banned entry to 227 U.S. citizens, including prominent journalists, researchers and government officials, for supporting what the Kremlin called “Washington’s Russophobic policies.”

The Russian companies designated by the U.S. on Monday have “either helped build or operate blockchain-based services or enabled virtual currency payments in the Russian financial sector, thus enabling potential sanctions evasion.”

The list includes Moscow-based fintech companies such as B-Crypto, Masterchain and Laitkhaus, which have partnered with sanctioned Russian banks to issue, exchange and transfer digital financial assets. Another designated entity, Atomaiz, has been involved in tokenizing precious metals and diamonds for Russian companies.

A fintech company, operating under the business names Netexchange and Netex24, along with its owner and director, Timur Bukanov, has been sanctioned for running a virtual currency exchange, which facilitated digital payments in Russian rubles and virtual currencies to sanctioned entities, such as Sberbank, Alfa-Bank and Hydra Market.

Hydra Market was a darknet marketplace that sold narcotics, stolen financial information and money laundering services. It was shut down by U.S. and German law enforcement in April 2022.

Some of the companies sanctioned by the U.S. were based abroad but were owned, controlled, or acted on behalf of Russia. One of these is Crypto Explorer, which operated a virtual currency exchange based in Russia and the UAE, offering conversions between virtual currencies, rubles and UAE dirhams.

As a result of the new sanctions, all property and interests of the designated entities in the U.S.'s possession or control were blocked, and any transactions with them are prohibited.

“Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to fund its war against Ukraine,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson. 

“As the Kremlin seeks to leverage entities in the financial technology space, Treasury will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system,” he added.

Last week, the U.S. also sanctioned two Russian nationals and two companies for a disinformation campaign that allegedly sought to “impersonate legitimate media outlets.” According to the statement by the U.S. Treasury Department, the sanctions individuals are involved in a “persistent foreign malign influence campaign at the direction of the Russian Presidential Administration.”