Authorities target Russian criminal gangs who used crypto to move cash

livemint.com:

U.S. and U.K. authorities on Wednesday targeted a money-laundering network that they said enabled Russian elites to evade international sanctions through the use of cryptocurrency, particularly the stablecoin tether.

The Wall Street Journal chronicled one of the network’s leaders, a glamorous Russian businesswoman called Ekaterina Zhdanova, in an article earlier this year about tether’s emergence as a favored tool of the financial underworld.

The U.S. Treasury Department said Zhdanova’s organization, called Smart Group, worked with other money launderers to convert bulk deliveries of cash into cryptocurrencies for clients. It said Russian members of the network sent tether to digital wallet addresses she controlled. Zhdanova also helped one member conceal the source of their funds to buy property in the U.K., said Treasury, which sanctioned five people in the network in addition to Zhdanova, who was blacklisted last year.

A lawyer for Zhdanova declined to comment.

“Russian elites sought to exploit digital assets—in particular U.S. dollar-backed stablecoins—to evade U.S. and international sanctions, further enriching themselves and the Kremlin," said Bradley Smith, Treasury’s acting undersecretary for terrorism and financial intelligence.

Tether operates the world’s most transacted cryptocurrency, known as a stablecoin for its 1:1 backing with the dollar. It is essentially a digital dollar, though unlike government-issued currencies that flow through regulated banks, its transactions are largely hidden from governments.

U.S. federal investigators are separately investigating tether’s issuer, British Virgin Islands-registered Tether Holdings, for allegedly violating financial crime laws, the Journal reported in October.