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USA is Teaching Ukraine to Track Russian Crypto Activity

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By Brennan Forrest - - 5 Mins Read
Russian map with bitcoins placed atop

The Internal Revenue Service (IRS) is reportedly holding virtual training sessions that will help Ukrainian government officials to trace where a crypto payment is being made. In the long term, this training will help Ukrainians track their enemies' (Russia) crypto activity.

The identification and tracking of blockchain transactions is the major focus of the training, although the IRS will teach them other aspects of the industry. In collaboration with blockchain analysis firm Chainalysis and Ukrainian investigators, The criminal investigation division of the agency will try to trace Russian oligarchs using cryptocurrencies to hide their assets since the illegal invasion of the Ukrainian territories. 

Bloomberg first reported the new development on Thursday, as they revealed that the IRS had given Ukrainian investigators free access to a Chainalysis tool that will help them with the probes.

According to a statement reportedly obtained from IRS Criminal Investigation Chief Jim Lee, "Sharing tools not only safeguard the US financial system but the global economy." The IRS aims to use its influence to collaborate with other law enforcement agencies in other parts of the world. They are doing this to stop Russian oligarchs from trying to evade the sanctions by hiding their wealth in crypto. The collaboration with Ukrainian investigators is another step in the IRS crypto investigation. 

IRS Increasing Their Interest in the Crypto Industry 

The Internal Revenue Service (IRS) has pointed out that the crypto industry serves as a major tool used by cybercriminals and corrupt officials to embezzle and launder money. This has made the agency increase its interest in the crypto industry. They have started going against crypto firms, whom they feel are aiding these corrupt elements to launder their ill-acquired money. At the time of writing, the IRS criminal unit has about 23 ongoing sanctions-related probes. 

One of their latest crypto probes was against the Kraken exchange. They were accused of failing to provide information to track money laundering personalities. The IRS accused the crypto exchange of failing to provide necessary data about its US customers that conducted crypto pay transactions worth $20,000 or more between 2016 and 2020.

"Cryptocurrency exchange Kraken Inc. hasn't complied with a court-approved IRS summons seeking records on customer identities and transactions and should be forced to furnish the records. Despite discussions between the parties, Kraken has failed to comply with the summons and has not produced the books, records, papers, and other data demanded in the summons. Kraken's failure to comply with the summons continues to this date," The IRS said in a statement. 

However, a Kraken spokesperson, speaking with Crypto News, confirmed they were not served with any petition by the IRS. However, the spokesperson admitted that the IRS had summoned the crypto exchange on many occasions. "We have not been served with the referenced petition, but we are aware of the IRS’ prior Summons.

One of Kraken’s guiding principles is maintaining the security and privacy of its client accounts. We understand that the Court has expressed concern over the scope of the Summons. The posture of this case has not previously given Kraken an opportunity to weigh in. We look forward to addressing our concerns to the Court," Kraken spokesperson said.