US, UK launch joint investigation into $20 billion moved through cryptocurrency to evade Russian sanctions
Bloomberg News reported on March 28 that the U.S. and British governments have launched a joint investigation into $20 billion worth of cryptocurrency transactions that may have violated Russian sanctions.
The transactions, allegedly routed through Russia-based cryptocurrency exchange Garantex, aim to evade international sanctions and potentially fund military activities in Ukraine.
In recent months, the United States has increasingly cracked down on the use of cryptocurrencies to evade sanctions. Most recently, we approved a cryptocurrency wallet linked to GAZA Now.
sanctions evasion
The Moscow-based exchange reportedly processed these significant sums using Tether’s stablecoin USDT, despite sanctions from both countries over Tether’s alleged financial crimes and role in facilitating illicit transactions in Russia.
Despite comprehensive sanctions against Russia, Western countries are having difficulty stemming financial flows into the country.
Russia has reportedly adopted a variety of strategies to evade these sanctions, including trading abroad, exchanging technology through intermediary countries, and utilizing encrypted digital currency transactions, complicating Western efforts to block financial support for Putin’s regime.
The Biden administration has stepped up its focus on cryptocurrency exchanges like Garantex to disrupt Russia’s financial channels. The $20 billion under investigation highlights the complex fight to effectively implement financial sanctions.
While the investigation was ongoing, there were no direct accusations of misconduct against Tether Holdings.
Tether’s response
In a statement, Tether Limited expressed its commitment to comply with compliance standards and continue to cooperate with law enforcement authorities. The company has taken steps to freeze assets linked to companies on the U.S. sanctions list to help combat illicit financial activity.
Garantex has remained silent about the investigation. British officials, including the U.S. Treasury, Treasury and National Crime Agency, declined to comment on the ongoing investigation.
Garantex was founded in Estonia in 2019 and has since moved most of its operations to Moscow due to regulatory issues and the revocation of its operating license.
The exchange has previously been criticized by the U.S. Treasury for engaging in illegal activities and ignoring anti-money laundering protocols.