US Attorney General Merrick Garland has approved the first transfer to Ukraine of money seized by the United States from Russian oligarch Konstantin Malofeev, who is close to Putin, the Voice of America has reported.
The USA said Malofeev financed Russians who promoted separatism in Crimea after Russia seized the peninsula in 2014.
"While this is the first time the United States has transferred confiscated Russian funds to rebuild Ukraine, it will not be the last," Garland said.
In February, a New York Court judge ruled in favour of the confiscation of $5.4 million belonging to Malofeev.
Andrew Adams, director of the US Department of Justice's Task Force KleptoCapture, called the case a "success story".
"This example is a real success story from the past year. Of course, $5.4 million is a drop in the bucket compared to the damage this war has done to Ukraine and the people of Ukraine, but it is a symbol of what can be done through a judicial process that is consistent with our Constitution and international law," Adams said.
"Punishing the Russian oligarchs is also punishing Russian President Putin," said Bill Browder, a prominent Kremlin critic and leader of the Magnitsky Global Campaign for Justice.
"Putin does not keep funds in his own name," Browder said in March. "Where does Putin keep his money? His funds are registered in the names of trusted oligarchs. These are also Putin's funds. That is why it is so important and that is the main goal."
Browder is also convinced that such measures against one Russian oligarch can warn hundreds of people against supporting the Putin regime.
The Kremlin called the transfer of assets "theft". Kremlin spokesman Dmitry Peskov said that such actions "will have consequences for the United States".