Transparency International Russia has conducted a study revealing that certain Russian digital asset exchanges are willing to exchange digital coins for paper money in the UK without going through the necessary Know-Your-Customer (KYC) procedures. The study discovered that over 20 cryptocurrency exchanges are operating in Moscow International Business Center, with eight of them ready to exchange U.S. dollar-pegged stablecoins for British pounds and deliver the cash to London.
Blacklisted Crypto Broker Suex Involved in Illicit Transactions
One of the exchanges identified in the study was Suex, a crypto broker blacklisted by the US Treasury Department's Office of Foreign Assets Control (OFAC) in September 2021 for facilitating ransomware-linked transactions. The study also revealed that another blacklisted exchange, Garantex, had received significant amounts of money from a platform called Pridechange.
Transfer Process for Russian Crypto Exchanges
The transfer process for these exchanges was found to be similar in all cases. Customers would send tether (USDT) to a wallet address provided by the exchange, and once the payment was confirmed, a courier, typically a Russian speaker, would deliver the fiat cash to a specified location in London. Despite anti-money laundering regulations requiring cryptocurrency exchanges to verify the identity of customers, none of the Russian platforms asked to verify the identity of Transparency International's undercover representatives, even when the amounts of money exceeded 10,000 British pounds ($12,000).
The Scale of Illicit Activity Unknown
The study revealed that the average monthly amount of money passing through these wallets ranges between $420,000 and $470,000, based only on the USDT turnover, with USD coin (USDC) also being used. Transparency International concludes that the scale of this activity is not insubstantial and warrants further investigation.
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