US Imposes Sanctions on Russian Drone Maker’s Crypto Addresses
The US Treasury’s Office of Foreign Assets Control (OFAC) has taken action against a developer at OKO Design Bureau, a Russian drone maker, by sanctioning the developer and adding three crypto addresses associated with the firm to the Specially Designated Nationals (SDN) list.
According to OFAC, the developer at OKO Design Bureau is one of the 300 individuals and entities sanctioned to limit Russia’s access to the global financial system and disrupt its influence in the war against Ukraine. It is believed that Russia is using cryptocurrency to evade sanctions imposed by the US and others.
A recent report by blockchain investigator Chainalysis revealed that OKO Design Bureau operated a Telegram channel to solicit crypto donations. The channel provided detailed descriptions and videos of its operations, including testing with the Russian Ministry of Defense and deploying unmanned aerial vehicles (UAVs) against Ukraine.
Despite its efforts, OKO Design Bureau’s crypto donation collection amounted to less than $1,000, indicating limited success in fundraising through cryptocurrency.
This case involving the sanctioned Russian drone maker is not isolated, as Chainalysis highlighted that several Russian militia groups explicitly used crypto addresses and donations to fund their war efforts.
In response to these developments, Secretary of the Treasury Janet L. Yellen emphasized that OFAC sanctions on crypto addresses would disrupt Russia’s war strategies.
The OFAC sanctions on crypto addresses reflect ongoing efforts to combat crypto-related and non-crypto-related crimes from Russia. The US financial watchdog aims to halt Russia’s ability to finance and sustain its military operations by targeting entities like OKO Design Bureau and its financial networks.
In recent years, individuals and entities seeking to evade sanctions imposed by OFAC have turned to cryptocurrency due to its anonymity. In March, OFAC, in collaboration with the UK’s Office of Foreign Sanctions Implementation (OFSI), sanctioned two individuals and three entities involved in fundraising for Hamas. One of the entities, Gaza Now, was found to have solicited donations for the organization and accepted funds in cryptocurrency.
During the same period, the US also sanctioned a Hezbollah crypto funding operator linked to terrorism financing in the Middle East.
According to Chainalysis, Russian militia groups received nearly $5.4 million in cryptocurrency donations between February 2021 and February 2023.
The OFAC sanctions list, established in 2018, continues to investigate and prohibit crypto and non-crypto-related crimes, developers, and companies involved in suspicious programs.