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US sanctions crypto exchanges used by Russian darknet market, banks. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has sanctioned two cryptocurrency exchanges for working with OFAC-designated Russian dark web markets and banks. The first, Bitpapa IC FZC LLC, is a peer-to-peer virtual currency exchange that caters to Russian nationals and has facilitated millions of dollars in transactions with two OFAC-designated Russian entities, Hydra Market and Garantex. Hydra Market was the world's largest darknet market, a Russian dark web platform for selling drugs and money laundering that had a turnover of $1.35 billion in 2020, 19,000 registered seller accounts, and served at least 17 million customers worldwide. Hydra also offered stolen databases, forged documents, and hacking-for-hire services. In April 2022, the German police seized Hydra Market's servers in a joint action with the United States and 543 bitcoins from its profits (currently worth roughly $38.5 million). Crypto Explorer DMCC (AWEX) operates as a crypto exchange in Russia and the United Arab Emirates and facilitates conversions between virtual currencies, rubles, and UAE dirhams. AWEX also provides cash services in Moscow and Dubai, allowing customers to load funds onto Sberbank and Alfa-Bank credit cards, two OFAC-designated Russian banks. The OFAC has sanctioned both Bitpapa and Crypto Explorer for their involvement in the financial services sector of the Russian Federation's economy. OFAC also designated multiple other Russian fintech companies and their owners for working with OFAC-designated Rosbank, VTB Bank, Sberbank, Sovcombank, and the Central Bank of Russia to help Russian companies and nationals evade sanctions. ​"Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to fund its war against Ukraine," said Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence. "As the Kremlin seeks to leverage entities in the financial technology space, Treasury will continue to expose and disrupt the companies that seek to help sanctioned Russian financial institutions reconnect to the global financial system." Following today's sanctions, all assets and interests in the United States connected to designated individuals and entities will be frozen. Entities at least 50% owned by blocked persons will also be subject to this freeze. Moreover, transactions involving blocked persons' assets will be prohibited unless authorized by OFAC. Financial institutions and parties that engage with sanctioned entities and individuals will be at risk of exposure to sanctions or enforcement actions. OFAC previously sanctioned the Moscow-based cryptocurrency exchange Garantex in April 2022, which was also linked to illegal Hydra Market transactions. It also designated the Sinbad, Tornado Cash, and Blender.io cryptocurrency mixing services for their use as money-laundering tools by the North Korean Lazarus hacking group.