Russian intermediaries are reportedly leveraging cryptocurrencies such as Tether’s USDT to circumvent the complex web of sanctions imposed by Western countries. They are said to be using USDT to protect critical components of military hardware.
The story centers on the case of Andrei Zverev, a self-styled Russian smuggler based in China who made a significant deal with a Russian arms manufacturing company known worldwide for its AK-47 rifle. I planned it.
How Russia is using cryptography to evade sanctions
In 2022, Zverev acquired electronic drone components critical to Russia’s military operations in Ukraine. He used a Hong Kong agent to circumvent traditional banking.
The move avoided scrutiny from financial institutions wary of sanctions.According to the Wall Street Journal (WSJ), Zverev chose This untraceable transaction uses the cryptocurrency USDT.
Tether’s stablecoin, which is pegged to the US dollar, has often faced allegations that it is notorious for black market trading. Its daily trading volume often exceeds that of Bitcoin, indicating Bitcoin’s role in clandestine financial activities. By 2023, Tether’s trading volume will approach $10 trillion, challenging major financial institutions such as Visa.
Russian entities are said to be using Tether to circumvent Western sanctions and procure dual-use military technology. This includes converting rubles to USDT and making payments to foreign suppliers to avoid detection. The U.S. Treasury Department is seeking to enact legislation to block such virtual currency transactions in order to maintain the effectiveness of sanctions.
“Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue financing its war against Ukraine,” said Brian Nelson, the U.S. Treasury Department’s assistant secretary for terrorism and financial intelligence. Stated.
Read more: 8 Best Crypto Wallets to Store Tether (USDT)
However, financial experts and blockchain analysis firms have shown that the scale of cryptocurrency use for illicit financing, including terrorism, is much smaller than initially feared.
Nelson also emphasized this point, saying that the traditional financial system, rather than cryptocurrencies, remains the preferred vehicle for large-scale illicit financing. Elliptic’s analysis reveals that groups like Hamas receive relatively small amounts of money through cryptocurrencies, further undermining the argument that cryptocurrencies are a major conduit for terrorist financing.
The discrepancy between the perceived and actual use of virtual currencies in illicit finance has fueled debate about the need and scope of strict virtual currency regulation.
Read more: Cryptocurrency regulation: What are the advantages and disadvantages?
Some lawmakers have called for aggressive regulatory action on national security grounds, while others have advocated for a balanced approach to avoid stifling innovation in the digital asset space.
Disclaimer
In accordance with Trust Project guidelines, BeInCrypto is committed to fair and transparent reporting. This news article is intended to provide accurate and timely information. However, before making any decisions based on this content, readers are encouraged to independently verify their facts and consult a professional. Please note that our Terms of Use, Privacy Policy and Disclaimer have been updated.
