IRS Trains Ukraine to Track Russian Cryptocurrency Activity – Here’s What You Need to Know
The Internal Revenue Service (IRS) is offering virtual and in-person training sessions on tracing blockchain transactions for Ukrainian officials.
The criminal investigation division of the agency has joined hands with blockchain analysis firm Chainalysis and Ukrainian investigators to trace Russian individuals suspected of using
The Internal Revenue Service (IRS), the United States’ tax authority, has recently been focusing on cryptocurrencies due to their susceptibility to financial frauds such as money laundering, market manipulation, and tax evasion. In a bid to tackle the issue, the agency has teamed up with blockchain analysis firm Chainalysis to offer virtual and in-person training sessions on tracing blockchain transactions to Ukrainian officials.
The collaboration aims to trace Russian individuals suspected of using cryptocurrency to conceal their assets following Russia’s invasion of Ukraine. The IRS is sponsoring Ukrainian investigators’ access to a Chainalysis tool that can be used in crypto-related probes. The goal is to improve information-sharing and case development between the US and Ukraine and to pursue sanctions evaders collaboratively.
The IRS has also been involved in some of the most significant recent crypto seizures, including the recovery of $3.6 billion worth of Bitcoin stolen from the 2016 hack of crypto exchange Bitfinex. In 2020 alone, the unit seized around $7 billion worth of crypto, according to comments from IRS Criminal Investigation Chief Jim Lee. At present, the IRS criminal unit has 23 ongoing sanctions-related probes.
In addition to its efforts to seize cryptocurrencies from criminals and evade tax payments, the IRS has also launched a probe into Binance, the world’s largest cryptocurrency exchange, alleging that it had poor adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) controls. The agency has also put forth 45 claims worth $44 billion related to unpaid taxes in the FTX case.
The IRS’s increased focus on cryptocurrencies indicates the growing importance of regulating the crypto industry. The agency’s collaboration with Chainalysis and Ukrainian investigators is a step in the right direction towards preventing financial frauds and promoting a safer global economy.
Lawmakers Voice Concern Regarding Use of Crypto to Avoid Sanctions
The Internal Revenue Service (IRS) has partnered with blockchain analysis firm Chainalysis to offer virtual and in-person training sessions to Ukrainian officials to trace blockchain transactions of individuals suspected of using cryptocurrency to evade sanctions. The IRS aims to improve information-sharing and case development between the US and Ukraine by collaborating with counterparts overseas to pursue sanctions evaders. The agency has seized around $7 billion worth of crypto in the past year and is currently conducting 23 ongoing sanctions-related probes. Crypto executives have refuted claims that crypto is being used to evade sanctions, stating that the transparency of the blockchain makes it more traceable than traditional assets like cash, gold, or art. Chainalysis provides blockchain analysis tools, expertise, and data to clients in both government and the private sector and has supported US agencies in several cases, including the recovery of more than $1 billion in Bitcoin stolen from the Silk Road darknet market.