On Tuesday, the CySEC issued a notification alerting various regulated organizations to attempts by blacklisted Russian people and entities to evade sanctions. It’s more worried about the potential for cryptocurrency to be used to evade sanctions.
The new notification came nearly one month after the Cypriot financial market supervisor instructed every regulated business to impose restrictions on Russia-concerned entities and people sanctioned by the EU.
How Much Have Volumes Increased or Decreased in Q4 2021?
The Cyprus Securities and Exchange Commission principally highlighted a report produced by the FinCEN of the US, which warned banking institutions about numerous Russian sanctions evasion schemes. The report, which was first released on 7th March, focused on using business vehicles, shell corporations, and intermediaries to hide the identities of sanctioned individuals within the banking system.
Russians who have been sanctioned are trying to utilize changeable digital currency. These exchanges typically start from or go to IP addresses that aren’t trusted nowadays in Russia and Belarus, but they can also come from other places. Foreign-based MSBs and exchanges use an anti-money laundering approach that does not adequately protect these consumers in high-risk jurisdictions. Perhaps Ransomware assaults and other forms of cybercrime are being used by Russian cyber attackers to store money, which is then transferred to firms that combine digital currencies.
Regulators Who Are Concerned
The Cyprus Securities and Exchange Commission also cited a warning from UK financial regulators that using cryptocurrencies to dodge taxes is just as unlawful as using other regulated assets. Regulated businesses are obligated to take iterations to mitigate the likelihood of sanctions evasion through cryptocurrencies, the regulator wrote, like installing additional sanctions, unique controls, if applicable, and checking for red flag signs that imply an elevated likelihood of sanctions evasion.
Cyprus Securities and Exchange Commission strongly advises Regulated Entities to be mindful of such signs… when establishing thorough research processes, particularly for continuing account and transaction monitoring.
Economic Sanctions Onslaught
Following President Putin’s decision to invade Ukraine, numerous western nations, notably the United States, the United Kingdom, and the European Union, sanctioned Russian leaders, officials, banking institutions, oligarchs, and other businesses.
All money and financial opportunities held, delivered, or controlled on their account or others’ behalf should be frozen immediately. Implement necessary measures, including, but not limited to, travel restrictions and assets frozen. Financial markets regulators require a report across all measures taken against sanctioned individuals and corporations by regulated Cypriot enterprises by 3rd March 2022.
CySEC requires CIFs to analyze the risks posed by targeted quantitative restrictions. Also, to notify Cyprus Securities and Exchange Commission if these measures have a material adverse effect on their activities, asset quality, or the money they hold, whether personally or on their client’s behalf.
Western countries have blocked Russian banks from the SWIFT network; that’s the most severe form of financial sanctions that can get put on them. The identities of these banks, meanwhile, have yet to be revealed.