US sanctions Russian woman for laundering oligarch funds with crypto

The US has issued sanctions against a Russian businesswoman, accusing her of helping Russian oligarchs bypass sanctions via crypto exchanges, laundering their funds, and using Dubai to legitimize money trails.

As announced on Friday by the US Treasury Department, 37-year-old Ekaterina Zhdanova is alleged to have helped international oligarchs from Russia bypass US sanctions that were implemented during the Ukraine war. 

Zhdanova is said to have used crypto to move over $100 million to the United Arab Emirates (UAE) on behalf of one wealthy client and allegedly offered a local tax residency service to help Russians create an origin of funds that international authorities wouldn’t question. 

According to officials, “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.”

Zhdanova allegedly used sanctioned crypto exchanges, such as Garantex, that lack anti-money laundering (AML) and Combatting the Financing of Terrorism controls, “to facilitate large cross-border transactions.” In July, research found that Garantex was facilitating the flow of crypto-denominated purchases for chemical precursors that make up the deadly drug fentanyl.

Read more: Why do this obscure Russian exchange’s emails come from Binance?

The Russian ransomware firm Ryuk is also said to have relied on Zhdanova to help launder stolen funds. In 2021, Ryuk reportedly made $150 million worth of bitcoin through targeted ransomware. Zhdanova is said to have laundered $2.3 million of suspected victim payments from Ryuk affiliates. 

She is also alleged to have helped a Russian client bypass sanctions by transferring $2.3 million into Western Europe via real estate and a fraudulent investment account. It’s unclear if this client is related to the Ryuk operation.    

What do the US sanctions against the Russian entail? 

As a result of today’s action, “all property and interests in property of the [Zhdanova] that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.” 

“In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.”

Any entities or persons that transact with Zhdanova under a designated set of transaction types may also find themselves sanctioned by the US.

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