The Financial Crimes Enforcement Network today issued an order that identifies PM2BTC — a Russian virtual asset service provider (VASP) that exchanges virtual currency, associated with Russian individual Sergey Sergeevich Ivanov — as a financial institution of “primary money laundering concern” in connection with Russian illicit finance under section 9714(a).
The order against PM2BTC is effective immediately and prohibits certain transmittals of funds involving the Russian exchange by any covered U.S. financial institution, according to FinCEN. It is one of several actions announced today by the U.S. Treasury Department other federal agencies seeking to disrupt alleged Russian cybercrime services. Another was an order by the Office of Foreign Assets Control sanctioning Ivanov and Cryptex, which is a virtual currency exchange registered in St. Vincent and the Grenadines and operating in Russia.
“PM2BTC provides direct [convertible virtual currency]-to-ruble exchange services using U.S.-sanctioned financial institutions, otherwise facilitates sanctions evasion, and has failed to maintain a credible and effective anti-money laundering and know-your-customer program,” FinCEN said.
FinCEN added that nearly half of PM2BTC’s exchange activity had links to illicit activity, “and correspondingly, that PM2BTC facilitates a substantially greater proportion of transactions with apparent links to money laundering activity in connection with Russian illicit finance as compared to 99% of other virtual asset service providers.” It also determined that PM2BTC employs “an unusual obfuscation that inhibits attribution of transactions to illicit activity and actors.”
In addition, FinCEN separately announced it is withdrawing its finding that failed ABLV Bank is a financial institution of primary money laundering concern under section 311. The Latvia-based bank’s license was suspended in 2018 and it is currently in a state of advanced liquidation, according to the agency.
