US Department of Treasury Sanctions Russian National for Using Crypto to Launder Funds

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned Russian national Ekaterina Zhdanova for utilizing crypto to launder and move money on behalf of “Russian elites.”

Strict sanctions have been enacted by the US and other nations following Russia’s unprovoked invasion of Ukraine.  Cryptocurrency has been used by some Russians in an attempt to evade sanctions.

The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, said they remain focused on safeguarding the international financial system against individuals who seek to exploit technology, including crypto.

Treasury reports that in March 2022, Zhdanova assisted a Russian client in moving over $2.3 million into Western Europe through an investment account and real estate purchases. Treasury said that Zhdanova utilizes crypto to enable large transactions via platforms that lack AML/CFT controls. Treasury named Russian crypto exchange Garantex Europe OU (Garantex) as a scofflaw, allowing its platform to be used by illicit actors.

Zhdanova is also said to use traditional businesses to maintain access to the international financial system.

Treasury mentions one example of a Russian oligarch seeking Zhdanova to move over $100 million in funds to the United Arab Emirates.

Additionally, Zhdanova has facilitated a United Arab Emirates tax residency service for Russian clients and possibly participated in obfuscating their identities.

Treasury reports that Zhdanova also provided services to individuals connected with the Russian Ryuk ransomware group.

In 2021, Zhdanova apparently laundered over $2.3 million of suspected victim payments on behalf of a Ryuk ransomware affiliate.


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