IRS-CI delivers cyber training, blockchain analysis tools to Ukrainian investigators


Training is part of global sanctions-related enforcement efforts

Date: May 11, 2023


Washington, DC — IRS Criminal Investigation (IRS-CI) and private sector partners are delivering blockchain analysis tools and cyber training to Ukrainian law enforcement agencies in April and May. The training enhances existing information-sharing and potential case development between Ukrainian and U.S. law enforcement agencies to target financial networks used by sanctioned Russian oligarchs who attempt to conceal their assets. 

As part of the partnership with Ukraine, IRS-CI donated licenses for Chainalysis Reactor, a cryptocurrency investigations platform, for up to 15 users. Approximately 50 Ukrainian law enforcement officers participated in a virtual training in April. A more advanced, in-person training will take place May 11 - 16 for nearly 20 Ukrainian investigators in Frankfurt, Germany. The trainings provide hands-on instruction in blockchain and cryptocurrency tracing, as well as instruction on developing operational leads. 

The Cyber Police Department of the National Police of Ukraine, the Economic Security Bureau of Ukraine, the Department of Cyber and Information Security of the Security Service of Ukraine, and the Prosecutor General’s Office of Ukraine are all participating in the cyber training. 

“Global financial crimes often consist of complex webs of offshore holdings and anonymous transactions. These trainings help participants hone their digital investigative skills to trace the source of blockchain funds and unmask cryptocurrency transactions with cryptocurrency forensic tools,” said IRS-CI Chief Jim Lee. “Sharing tools not only safeguards the U.S. financial system, but the global economy.” 

"It is important for us to identify all Russian assets on the territory of Ukraine. We resist the aggressor state not only on the battlefield, but also on the economic front. The international experience of conducting investigations using digital data and the study of algorithms for combating financial networks contributes to increasing the professionalism of our employees,” said Eduard Fedorov, acting director of the Economic Security Bureau of Ukraine. 

“From the facilitation of donations to ransomware attacks and sanctions evasion, cryptocurrency is playing an unprecedented role in Ukraine in both good ways and bad,” said Michael Gronager, co-founder and CEO, Chainalysis. “We commend the work of IRS-CI in empowering Ukrainian law enforcement with the data, tools, and training to detect and investigate illicit blockchain activity as the stakes for doing so continue to accelerate.”

“Today, the Cyber Police counteracts not only the usual facts of crime, but also provides resistance to Russian forces on the internet. One key area is the identification and elimination of centers of support for occupation forces that raise funds for the purchase of things necessary for the war,” said Yurii Vykhodets, police colonel of the Cyber Police Department of the National Police of Ukraine. “We often see fundraising campaigns conducted with the use of cryptocurrency, as Russia believes in the possibility of circumventing sanctions by using virtual assets. The training is timely and provides a strong impetus for more effective work by the Cyber Police in this area. We are grateful for this initiative, as well as other projects aimed at developing our employees.” 

Currently, IRS-CI has 23 ongoing sanctions-related investigations. The agency is actively working with the Office of Foreign Assets Control to support sanctions designation investigations and freeze assets controlled by or associated with those on the Specially Designated Nationals and Blocked Persons List. International trainings help ensure that foreign partners possess the necessary tools to conduct effective cyber investigations. 

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.