U.S. Charges 5 Russians With Crypto Money Laundering to Evade Sanctions

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Crypto Regulation
U.S. Charges 5 Russians With Crypto Money Laundering to Evade Sanctions

The U.S. government recently announced charges against 5 Russian nationals and two oil traders for breaching sanctions. According to reports, the accused persons used crypto assets in sanction evading to fund Russia in the war against Ukraine. 

The U.S. Charges Several People for Evading Sanctions

According to reports, the U.S. is charging 5 Russian nationals and two oil traders for sanction evasion and money laundering. The accused include Yury Orekhov, Artem Uss, Svetlana Kuzurgasheva, Timofey Telegin, and Sergey Tulyakov. The two Venezuelan illicit oil traders are Juanfe Serrano and Juan Carlos Soto. The government release noted that:

“Today, we announce dismantling a sophisticated network consisting of at least five Russians and two Venezuelans, each of whom is directly linked to corrupt state-owned enterprises, who knowingly sought to conceal the theft of U.S. military technology and profit off black market oil. This network schemed to procure sophisticated technology in direct support of a floundering Russian Federation military-industrial complex.”

The federal prosecutors mentioned that the Russian nationals purchased electronic components like satellites and radars. The electronics were found in Russian weapon centers in Ukraine. They also shipped Venezuelan oil via a German-registered company. 

Used Crypto to Shield Their Illegal Activities

According to reports, the accused persons used cryptocurrencies to try and evade sanctions. Two of the 5 Russians, Orekhov and Uss, were arrested on October 17th in Germany and Italy, respectively. Adams, Task Force KleptoCapture Director, recently noted that:

“Webs of shell companies, cryptocurrency, and an international network of fraudsters failed to shield Orekhov and his cronies from apprehension by U.S. law enforcement. Stamping out evasion of military technology tariffs is among the Task Force’s highest priorities. Today’s arrests reflect the power of those controls when enforced by a dedicated team of expert agents and devoted foreign partners.”

Following the Ukraine invasion earlier this year, there have been claims that many Russian Oligarchs have been using crypto to evade sanctions. Many watchdogs across Europe and the U.S. had to create stringent rules against sanction breakers. 

On October 3rd, reports emerged that a pro-Russian group evaded U.S. sanctions using crypto. The group raised over $400k in crypto in a mission to fund Russian military groups. Several other pro-Russia groups, including a Neo-Nazi paramilitary group called Task Force Rusich, have used digital assets in fundraisings. OFAC has already sanctioned Task Force Rusich.

Some crypto-focused firms block Russian accounts to help prevent sanction evasion. For instance, Blockchain.com announced a ban on Russian-based crypto accounts just a few days ago. 

American watchdogs have vowed to continue investigating and prosecuting anyone involved in helping Russia’s invasion of Ukraine through the shadow economy. 

Crypto Assets Used for Good in the War

While Russian paramilitary groups use crypto to evade sanctions, Ukraine uses the assets for good. For instance, Ukraine and Ukrainians have been accepting crypto donations to help fund different things, including the military. Earlier this year, a Ukraine flag NFT was created to help Ukraine during the harsh times.

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