Clifford Chance

Treasury Issues First-Ever Section 9714 Order Prohibiting Transmittal of Funds Involving Bitzlato

February 7, 2023

On January 18, 2023, the U.S. Department of the Treasury ("Treasury")'s Financial Crimes Enforcement Network ("FinCEN") issued an order identifying Bitzlato Limited ("Bitzlato"), a virtual asset service provider, as a "primary money laundering concern" in connection with Russian illicit finance and prohibiting certain transmittals of funds by any covered financial institution involving Bitzlato pursuant to the Combatting Russian Money Laundering Act ("CRMLA"). The action was taken in conjunction with the FBI's arrest of Bizlato's founder Anatoly Legkodymov.  As the Deputy Secretary of the Treasury commented at the subsequent press conference, this action is "the first of its kind specifically under new authorities to combat Russian illicit finance," also noting that "identifying Bitzlato as a 'primary money laundering concern' effectively renders the exchange an international pariah.

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