Russia-Ukraine conflict: how to navigate sanctions risks with blockchain analytics

Since Russia’s full-scale invasion of Ukraine on February 24th 2022, both sides have used blockchain technology to aid their respective efforts. Many campaigns have sought to harness core developments in the crypto ecosystem to aid their fundraising – from decentralized finance (DeFi) to crypto pre-paid cards.

Using its internal proprietary data, Elliptic has conducted an in-depth analysis into the use of cryptoassets on both sides of the conflict – ranging from humanitarian causes to sanctioned groups suspected of war crimes.

In this excerpt from Elliptic’s new Crypto in Conflict report we will examine how to use blockchain analytics to manage potential sanctions risks brought on by the attack on Ukraine.

Staying safe

To comply with sanctions such as those imposed globally on Russia, and ensure that they do not deal with sanctioned actors, cryptoasset exchanges and financial institutions can employ blockchain analytics solutions such as those developed by Elliptic. Blockchain analytics can be used in identifying and managing potential sanctions risks involving Russia and Russian-related entities in four primary ways:

Wallet screening: to identify if crypto wallets may be controlled by sanctioned actors in order to prevent customers withdrawing funds to those wallets.

Transaction screening: to identify where the ultimate source or destination of a customer’s transactions involves exposure to sanctioned parties.

Investigations: to conduct in-depth analysis of funds flows while investigating potential sanctions evasion cases and suspected breaches.

VASP Due Diligence: identify potential sanctions risk exposure via high risk crypto service providers

Below, we describe how blockchain analytics can facilitate these areas of sanctions compliance.

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