Chainalysis release free Russian sanction scanning tools
With moral panic emerging from Washington DC and the media over the potential for Russia to use crypto to bypass sanctions, crypto tracking company Chainalysis has announced the launch of sanctions screening tools for the entire cryptocurrency industry, free of charge. The tools include an API expected to launch next month and an on-chain oracle that's available right now.
The release comes amid claims that Russia is attempting to sidestep international sanctions using cryptocurrencies. The claims are unsupported by any evidence, but the Chainalysis tools will help put to rest this myth and give financial institutions and Virtual Asset Service Providers (VASPs) who us transaction monitoring solutions a better ability to prove compliance with international sanctions and regulations.
The API and oracle tools will make it easier for organisations to integrate sanctions screening into their operations:
The API is designed for web/mobile UI's and web servers: Users receive an API key whereby they can check if an address of interest is on the sanctions list or not;
The on-chain oracle is designed for smart-contract use: Users can call the Chainalysis oracle from another smart contract to check if an address is on the sanctions list.
Russia is a leader in cryptocurrency adoption, and individuals and entities in Russia have always accounted for a disproportionate amount of cryptocurrency-based crime primarily, centred around ransomware, so Russian linked exchanges and wallets have long been featured in Chainalysis' databases as connections of concern.
According to data compiled by Chainalysis, over 74 per cent of ransomware revenue in 2021 (over USD$400 of digital currency) went to entities highly likely to be affiliated with Russia. Around 13 per cent of funds sent from ransomware addresses went to users believed to be in Russia, more than any other country by a considerable margin.
While ransomware has already dropped significantly following the high profile recovery of some of the ransom in the Colonial pipeline attack, any ransom of computer systems is a serious matter (and does not need any crypto connection for money to be demanded by hackers) and so should be treated most seriously.