US Treasury Sanctions Crypto Sanctions Evaders

By Mark Hunter

14 hours agoThu Dec 05 2024 10:08:23

Reading Time: 2 minutes

• The U.S. Treasury has sanctioned a network of individuals and entities for using digital assets to evade sanctions
• The sanctions target actors involved in illicit activities, including North Korea’s weapons procurement efforts
• The Treasury emphasizes its commitment to protecting the international financial system from exploitation

The U.S. Department of the Treasury has imposed sanctions on a network of individuals and entities accused of exploiting digital assets to bypass international sanctions. The targeted network is alleged to support illicit financial activities, including aiding North Korea’s weapons procurement programs. The entities, including a Hong Kong-based company and a Chinese national, are accused of helping the rogue nation to launder funds through cryptocurrencies .

TGR Group Laundered Money for North Korea

The Office of Foreign Assets Control (OFAC) published a press release yesterday in which it identified key participants in the network, including the Hong Kong-based Hualing Trading Co., Ltd., which facilitated transactions for North Korean entities tied to weapons proliferation. Additionally, Chinese national Li Fangwei has been sanctioned for allegedly leveraging digital currencies to assist North Korea’s procurement efforts. 

OFAC described the collective, referred to as the TGR Group, as an “extensive sanctions evasion and money laundering network that works to obfuscate the illicit activities of its clients, including through the use digital assets, such as stablecoins like Tether (USDT).” The agency alleges that the group is controlled by Ukrainian national George Rossi and that it provides a range of services to place, layer, and integrate illicit financial schemes into the global financial system. These schemes include:

• The laundering of funds associated with sanctioned entities; providing an unregistered service to exchange cash and cryptocurrency
• The receipt of cash and making the value available to clients in the form of cryptocurrency; providing a pre-paid credit card service
• Obfuscating the source of funds to allow high-net worth Russian nationals to purchase property in the United Kingdom

OFAC added that the sanctioned network uses digital assets to obscure the origins and destinations of financial transactions, effectively bypassing traditional oversight mechanisms. By exploiting these technologies, the network enabled already sanctioned entities to access international markets and finance activities that threaten global peace, such as weapons development.

Alongside Rossi, 11 entities and individuals from Asia and Europe were sanctioned, which OFAC hopes will halt the activities of the TGR Group.