Russian National Hit With US Sanctions for Crypto Money Laundering

Published: Nov 3, 2023
Written By:
Vignesh Karunanidhi
Milk Road Writer

The US Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions this week on Russian national Ekaterina Zhdanova for using crypto to help Russian elites evade international sanctions related to the war in Ukraine.

According to the Treasury announcement, Zhdanova facilitated over $2.3 million in fund transfers to Western Europe on behalf of a Russian client in March 2022. The client used the money to open investment accounts and purchase real estate after obfuscating the source of their wealth.

“Through key facilitators like Zhdanova, Russian elites, ransomware groups, and other illicit actors sought to evade U.S. and international sanctions, particularly through the abuse of virtual currency.”

Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson

The US Department of Treasury highlighted:

  • Zhdanova allegedly used the OFAC-sanctioned Russian crypto exchange Garantex to conduct large virtual currency transactions. Garantex is accused of flouting anti-money laundering controls.
  • Zhdanova leveraged cash, connections to money launderers, and traditional businesses like a luxury watch company to move funds internationally.
  • She helped a Russian oligarch try to transfer over $100 million in wealth to the UAE. Zhdanova also provided a UAE tax residency service to help clients conceal their identities.
  • In 2021, Zhdanova allegedly laundered over $2.3 million in suspected ransomware payments on behalf of the Russia-linked Ryuk cybercrime group.

The sanctions aim to crack down on the use of crypto to evade restrictions on Russia after its February 2022 invasion of Ukraine. Treasury Under Secretary Brian Nelson said virtual assets are being exploited to offset the impact of sanctions. The action blocks Zhdanova’s US property and prohibits transactions with her by US individuals or companies.

Zhdanova’s designation highlights the growing use of cryptocurrency to bypass traditional finance channels and sanctions. Treasury’s sanctions expand US pressure on Russia over the Ukraine war.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 5 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.