On January 18, 2023, FinCEN issued an order that identifies the virtual currency exchange Bitzlato Limited (Bitzlato) as a “primary money laundering concern” in connection with Russian illicit finance. This is the first order issued pursuant to section 9714(a) of the Combating Russian Money Laundering Act, as amended, and highlights the serious threat that business operations that facilitate and support Russian illicit finance pose to U.S. national security and the integrity of the U.S. financial sector.
In a statement, FinCEN Acting Director Himamauli Das said the following:
“Bitzlato poses a global threat by allowing Russian cybercriminals and ransomware actors to launder the proceeds of their theft. As criminals and criminal facilitators evolve, so too does our ability to disrupt these networks. We will continue to leverage the full range of our authorities to prohibit these institutions from gaining access to the U.S. financial system and using it to support Russian illicit finance.”
Bitzlato is a virtual currency exchange offering exchange and Peer-to-Peer (P2P) services. According to FinCEN, Bitzlato is of primary money laundering concern in connection with Russian illicit finance. In its investigation, FinCEN found that Bitzlato:
Used to facilitate processing and laundering proceeds from ransomware attacks;
Used to facilitate darknet markets and scams;
Has engaged in a significant volume of Russian illicit finance transactions; and
Does not adequately combat money laundering and illicit financing on its platform.
Through the order issued by FinCEN, covered financial institutions are prohibited from engaging in a transmittal of funds from or to Bitzlato, or from or to any account or CVC address administered by or on behalf of Bitzlato, effective February 1, 2023.
Read FinCEN’s full press release here.
The notice of an order can be found here.
