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A survey of digital asset exchanges in the Russian capital has found that some of them are ready to buy digital coins and deliver paper money in the UK. The transfer of funds usually does not involve the identification of the clients, Transparency International Russia reveals in a report.
Russian crypto exchanges that can transfer money abroad without following know-your-customer (KYC) and anti-money laundering (AML) procedures are the focus of a study conducted by the Russian Chapter of Transparency International. The results were presented in a new report published on Wednesday.
The association’s researchers were able to identify more than 20 coin trading platforms operating from the Moscow International Business Center, commonly referred to as Moscow City. Through conversations with operators, they also found that eight of them were ready to exchange US dollar-pegged stablecoins for British pounds and hand over the cash to recipients in London.
The authors noted that one of them is Suex, a crypto broker blacklisted by the US Treasury Department’s Office of Foreign Assets Control (OFAC) in September 2021 for facilitating ransomware-related transactions. They also add that a platform called Pridechange sent significant amounts of money to Garantex, another blacklisted exchange with offices in Moscow city.
The way the transfers were made was the same in all cases. First, a customer must send the amount in tether (USDT) to a wallet address provided by the exchange. Once the payment is confirmed, the operator will send a courier, usually a Russian speaker, to a specified location in London to deliver the fiat money on the same or next day.
UK anti-money laundering regulations require cryptocurrency exchanges to register and carry out customer checks. None of the Russian platforms have ever asked to confirm the identity of Transparency’s undercover representatives, despite the sums of money exceeding 10,000 British pounds ($12,000).
During the communication with the crypto exchanges, the organization obtained the crypto addresses used for these transfers. The transaction history shows that the average monthly amount passing through such wallets varies between $420,000 and $470,000. The estimate is based only on the USDT turnover while usd coin (USDC), another stablecoin, was also used.
“The results of our study suggest that at least a few shadow OTC crypto exchanges are operating in the UK and are ready to provide cash without carrying out the necessary KYC procedures… The full extent of this activity may be unknown, but it is clearly not insignificant and deserves closer scrutiny”, concludes an excerpt of the report.
Do you think the Russians are actively using these channels to transfer funds abroad amid economic restrictions over the Ukraine war? Share your thoughts on the topic in the comments section below.
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