An international investigation has dismantled a Russian money-laundering network linked to organized crime and sanctioned elites.

Led by the UK’s National Crime Agency (NCA), the operation involved US and European authorities. It resulted in 84 arrests and the seizure of over £20 million ( ~$25.4 million) in cash and cryptocurrencies.

Authorities Destabilise Money Laundering Network

Two Moscow-based exchanges, Smart Group and TGR Group, were key to the crypto laundering network. These platforms converted illicit cash into untraceable digital assets, enabling crimes like drug trafficking and espionage financing. Authorities revealed that even state operations used these exchanges to evade international sanctions.

“For the first time, we have been able to map out a link between Russian elites, crypto-rich cyber criminals, and drugs gangs on the streets of the UK. The thread that tied them together – the combined force of Smart and TGR – was invisible until now,” said Rob Jones, Director General of Operations at the National Crime Agency.

Ekaterina Zhdanova, the head of Smart Group, was arrested in France, while George Rossi of TGR Group remains at large. They have both since been sanctioned by the US Treasury Department for facilitating sanctions evasion and committing money laundering. The network operated in over 30 countries, exploiting cryptocurrency anonymity to obscure illicit funds.

Another branch of the investigation exposed that they were also working with a cash courier network operated by Semen Kuksov and Andrii Dzektsa. Their couriers laundered over £12 million ( ~$15.26 million) in the UK in just two-and-a-half months and managed similar operations across Europe.

Kuksov, linked to high-turnover cryptocurrency wallets, and Dzektsa received prison sentences of five years and a half, and five years, respectively. A courier, Igor Logvinov, was arrested in Ireland and sentenced to three years.

Emergence of Russian Networks

This crackdown has put significant financial pressure on these networks since. Russian-speaking laundering groups operating in London reportedly charged high commission rates by mid-2024, reflecting the increasing difficulty of working in the city.

“The networks disrupted by Operation Destabilise were hidden in plain sight, operating from within our communities, moving vast sums of money linked to the drugs trade and serious violence on our streets,” said Nik Adams, T/Assistant Commissioner of City of London Police and NPCC lead for economic crime.

However, this case is not an isolated one. In September, the US Justice Department charged Russian nationals Sergey Ivanov and Timur Shakhmametov with laundering over $1 billion via illicit cryptocurrency platforms. These exchanges enabled cybercrime and allowed sanctioned entities to bypass restrictions. On December 4, the US Treasury also sanctioned the TGR Group for aiding Russian elites.

The Financial Action Task Force (FATF) has called for stricter oversight of virtual assets. Updated recommendations call for regulating virtual asset providers to combat financial crime effectively. Meanwhile, the success of the NCA’s operation highlights growing international collaboration against crypto-enabled money laundering.

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🎄Best crypto platforms in Europe | December 2024

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