NCA Uncovers Russian Crypto Networks for Money Laundering & Sanctions Evasion
Dec 5, 2024 at 5:47 AM
The U.K. National Crime Agency (NCA) made a significant announcement on Wednesday. This operation, codenamed Operation Destabilise, aimed to disrupt Russian money laundering networks that were causing chaos across various regions including the U.K., the Middle East, Russia, and South America. A total of 84 suspects linked to two Russian-speaking networks, Smart and TGR, were arrested. Remarkably, £20 million ($25.4 million) in cash and cryptocurrency was seized. These networks were based in Moscow's Federation Tower, which is notorious for being a hub for money laundering firms.Concurrent Actions and Sanctions
Simultaneously, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) took action by sanctioning five individuals and four entities associated with the TGR Group. Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith emphasized that through the TGR Group, Russian elites were exploiting digital assets, particularly U.S. dollar-backed stablecoins, to evade sanctions and enrich themselves. The Treasury Department described the TGR Group as an extensive sanctions evasion and money laundering network. It leveraged other illicit actors like the Smart Group, headed by Ekaterina Zhdanova. In November 2023, Zhdanova was sanctioned for her role in helping high-net-worth Russian nationals and cybercriminal crews launder cryptocurrency proceeds. She was also accused of providing services to individuals connected to the now-defunct Ryuk ransomware group, laundering over $2.3 million of suspected victim payments in 2021. The TGR Group offered a wide range of illegal financial services, including laundering funds of sanctioned entities, an unregistered service for cash and cryptocurrency exchange, accepting cash receipts and converting them into digital assets for clients, a prepaid credit card service, and concealing the source of funds to enable Russian elites to purchase property in the U.K.The Role of the Smart Network
The NCA pointed out that the Smart network was used to fund Russian espionage operations between late 2022 and summer 2023. Although the exact nature of the malicious activity remains undisclosed, it highlights the extensive reach and impact of these money laundering networks. "Smart and TGR provide a service that enables Russian elites, and designated individuals and entities to access Western economies that would otherwise be denied to them through sanctions or other financial restrictions," the agency stated. "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 U.K. The thread that tied them together – the combined force of Smart and TGR – was invisible until now."
