The US Treasury Sanctions Russian National for Money Laundering with Virtual Currency
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Ekaterina Zhdanova, a Russian national, for her involvement in laundering and moving money for Russian elites using virtual currency. This action is part of a broader crackdown on Russian states, elites, and others who utilize virtual currency to mitigate the impact of international sanctions.
Treasury’s Efforts to Safeguard the Financial System
Brian E. Nelson, the under secretary of the Treasury for terrorism and financial intelligence, emphasized the commitment to protecting the US and international financial system from individuals seeking to exploit this technology and engage in illicit financial activities within the virtual assets ecosystem.
Illicit Financial Activity and Evading Sanctions
Zhdanova assisted a client in Russia in concealing their wealth and subsequently transferred over $2.3 million into Western Europe through fraudulent investment accounts and real estate purchases. This type of illicit financial activity enables the evasion of multilateral US and international sanctions imposed on Russia for its unprovoked war and prevents sanctioned individuals and entities from accessing the international financial system.
Zhdanova’s Methods
Zhdanova utilized the OFAC-designated Russian crypto exchange Garantex Europe OU, known for disregarding anti-money laundering (AML) and combating the financing of terrorism (CFT) obligations. She also employed cash transactions and traditional businesses to facilitate her activities. Additionally, Zhdanova managed virtual currency transfers for oligarchs who relocated worldwide, including assisting a Russian oligarch in transferring over $100 million to the United Arab Emirates.
Facilitating Tax Residency Services
Zhdanova was involved in offering a “United Arab Emirates tax residency service” to clients in Russia, potentially aiding in the obfuscation of their identities. This service provided clients with a United Arab Emirates tax residency, identification card, and bank account. Payments were made in cash or virtual currency and received at a Dubai bank account, subsequently transferred to foreign bank accounts according to the client’s discretion.
Hot Take: US Treasury Takes Action Against Russian National for Money Laundering
The US Department of the Treasury has imposed sanctions on Ekaterina Zhdanova, a Russian national, for her role in laundering money for Russian elites using virtual currency. This action is part of the Treasury’s efforts to crack down on individuals who exploit virtual assets to evade international sanctions. Zhdanova used various methods, including a Russian crypto exchange known for disregarding AML/CFT obligations, cash transactions, and traditional businesses. She facilitated virtual currency transfers for oligarchs and offered tax residency services to clients in Russia. The Treasury’s actions demonstrate their commitment to safeguarding the financial system from illicit financial activities.
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