A recently unsealed opinion at a U.S. District Court in Washington DC revealed that the federal courts in the U.S. are now prosecuting crypto exchanges that allow their users to skirt sanctions, whether knowingly, or not.
Transfers to North Korea
The case involved an exchange probably based in the isolated and heavily sanctioned pariah country of North Korea, and its long arm in the U.S. in the form of a front company. The hub has made possible $10M exchanging hands between the U.S. and North Korea.
The unsealed opinion turns inside out the belief that crypto and virtual assets constitute an elusive class of financial instruments that can be used for sanctions evasion with no fear of leaving a trace. It signifies a leap in the mainstreaming of virtual assets and their operators as they are as much in the radar of law enforcement as financial operators handling fiat and commodities. The DOJ charging an exchange for the first time also sets a precedent for the tracing of transactions by the authorities.
Previously, despite the fact that transactions are registered on public blockchain ledgers, crypto was perceived to be sufficiently, and almost mythically opaque to allow for exploitation by criminal enterprises. Nevertheless, the zeal of regulatory bodies to catch up with the new tech, the and the U.S. Treasury’s designating of a “ransomware-enabling” VC exchange in Russia (next to Hydra, the globe’s biggest Darknet Market, also operating from Russia), simply upturned the legend of the anonymity of crypto currencies.