Ekaterina Zhdanova, a prominent Russian entrepreneur, is an integral component of the network, having played a significant role in Tether’s ascent to prominence in the financial community.
Authorities in the United States and the United Kingdom have responded to allegations that a money-laundering network is assisting Russian elites in circumventing international sanctions by utilizing cryptocurrency, particularly the stablecoin tether.
According to a report by the Wall Street Journal, Ekaterina Zhdanova, a prominent Russian businesswoman, is at the core of the network. She is recognized for her role in the financial underworld’s ascent of Tether.
According to the report, Zhdanova was the leader of an organization known as Smart Group, which purportedly facilitated the conversion of mass cash deliveries into cryptocurrency for high-profile clients.
Citing the U.S. Treasury Department, the Wall Street Journal reported that Russian members of the network transferred tether to digital purses under Zhdanova’s control.
Additionally, she is under suspicion of assisting a client in concealing the source of funds used to acquire property in the United Kingdom.
In addition to her blacklisting from the previous year, Zhdanova and five other individuals have been sanctioned.
“In order to avoid U.S. and international sanctions, the Russian elites attempted to use digital assets, especially stablecoins backed by U.S. dollars, to benefit themselves and the Kremlin,” according to Bradley Smith, who is serving as the acting undersecretary for terrorism and financial intelligence at the U.S. Treasury.
As a stablecoin tied to the dollar, Tether facilitates cryptocurrency transactions. Its transactions frequently occur outside of conventional financial supervision, in contrast to those of government-regulated currencies.
Russia is fond of cryptocurrency due to its simplicity in circumventing financial sanctions imposed by the United States.
Although Tether Holdings, the British Virgin Islands-based issuer, was not directly involved in this investigation, U.S. authorities are conducting a separate investigation into the company to determine whether it has violated financial crime laws.
According to messages obtained from Zhdanova’s Telegram account, she orchestrated substantial ruble-to-Tether transactions, with digital wallets associated with her managing more than $350 million.
According to reports, she maintained connections with high-ranking officials and oligarchs in Russia. Zhdanova, who previously oversaw luxury travel services and boutique hotels in Moscow, was apprehended in France in late 2023 as part of an independent investigation into money laundering.
Approximately $19 million has been purportedly laundered through currency handovers throughout Britain by a London-based network, which is purportedly directed by Zhdanova.
The NCA observed that cash deliveries were frequently followed by cryptocurrency transactions of comparable value that occurred within a short period of time.
Criminal organizations utilized these funds to acquire firearms and narcotics without transferring tangible currency across borders.
In connection with the network, authorities have made 84 arrests, according to the report. Last week, Russian President Vladimir Putin signed a federal law that establishes a new tax rule on crypto mining and recognizes digital currencies as property.
Detailed in an official document published on November 29, the legislation delineated the tax regulations and requirements for the cryptocurrency sector.
In August 2024, Russia made a substantial stride in its efforts to regulate cryptocurrency mining by legalizing the practice.
This legislation, which became effective on November 1, exclusively permits registered Russian entities and entrepreneurs to mine cryptocurrency.
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