(Bloomberg) -- Two giant Wall Street banks are withdrawing from handling trades of Russian debt after the Biden administration’s surprise announcement last week it’s banning US investors from scooping up such assets.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. were still matching sellers who wanted out of the debts with interested buyers this month, according to market professionals. Now, JPMorgan is pulling back after the US Treasury’s Office of Foreign Assets Control said investors in the U.S. aren’t allowed to acquire them, a person with knowledge of the decision said. A spokesperson for Goldman said it’s halting such transactions, too.

“Consistent with the updated OFAC guidance and Goldman Sachs’ wind-down of activities in relation to Russia, the firm will no longer be conducting certain client-related market making activities regarding Russian entities,” the bank said in the statement.

The Treasury Department’s announcement late June 6, stepping up financial sanctions, caught market participants off guard and set off a flurry of talks with lawyers. Earlier policies from the US had allowed trading shops including Goldman Sachs and JPMorgan to help clients pounce on cheap Russian debt in the secondary market as many holders rushed to unload the assets. Now, US market participants are prohibited from purchasing both new and existing debt and equity securities issued by a Russian Federation entity.

Banks routinely scoop up debt because clients asked them to, or because they expect to find ready buyers. When Goldman and JPMorgan’s activity in the market came to light earlier this year, they said they were helping clients reduce exposure. The updated guidance means US investors can still sell or hold Russian debt, but they can’t acquire more, a spokesperson for OFAC said last week.

The Ukraine invasion initially sent prices of Russia-linked bonds tumbling, even if they weren’t subject to international sanctions. The continued trading of such securities soon became a contentious topic, both on Wall Street and in Washington, where Senator Elizabeth Warren accused banks of undermining sanctions. 

Warren and Representative Katie Porter, a fellow Democrat, urged JPMorgan and Goldman Sachs last month to hand over names of clients trading such securities -- a demand that threatened to widen the spotlight from banks to the broader universe of hedge funds and other investors who jumped in to turn a quick profit.

Even in the distressed-debt market, where sudden price slumps draw vulture investors seeking to ride a rebound, the wagers on Russia-linked debt had stoked a considerable behind-the-scenes debate among industry professionals. Banks also reaped profits from pitching a popular trade in the weeks following Russia’s invasion of Ukraine -- the so-called basis trade where investors buy both the bonds and credit default swaps.

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