Russian exchanges exposed in crypto-for-money scandal
A survey of no-questions-asked transfers between Moscow and London found several Russian crypto exchanges willing to accept cash trades.
The investigation was carried out by the non-profit organization Transparency International (TI), which seeks to “end the injustice of corruption by promoting transparency, accountability and integrity”.
Releases the report with the ironic title, “FROM MOSCOW CITY WITH CRYPTO: A step-by-step guide to receiving cash from Russia Anonymous in London“, the investigators described their attempts to buy USDT in Russia and exchange it for cash when they were physically present in the British capital.
“our primary goal was to understand how many of them accept cash, exchange stablecoins, and offer the option to sell stablecoins back for cash abroad. IN In particular, we looked for the opportunity to get money in London in exchange for the USDT stablecoin.”
Crypto for cash
TI stated that crypto offers Russians “a way to safely transfer your moneyy” out of the country. This method is advantageous due to insufficient control over the source of the crypto buyer’s income and by circumventing $10,000 cash limits placed at airports, the non-profit said.
Since Bitcoin and altcoins are subject to volatility risk, TI stated that USDT, as the largest stablecoin by market share, offers “safe haven” qualities for no-questions-asked transfers.
“USDT is a safe haven for those who want anonymity when transferring their money abroad from Russia and do not want to take any risk related to the exchange rate fluctuations related to BTC and altcoins.”
Investigators mentioned USDC in passing, but stuck to using USDT in the investigation to keep the chat operator’s interactions to a minimum and avoid arousing suspicion.
Despite TI’s implied suspicion of crypto for cash transactions, it’s worth reminding that cash is the ultimate form of private transaction, and the desire for privacy is not inherently criminal.
TI identified 21 crypto exchanges located in the Moscow City district of the Russian capital. Further research noted that 14 of the 21 exchanges offer Over-the-Counter (OTC) services to exchange rubles in cash for USDT.
Although cash exchange services were not openly advertised, TI found that 8 of the 21 exchanges were willing to facilitate the second part of the trade by exchanging USDT for cash in London. The transactions were arranged through Telegram or the respective exchange’s website live chat. The eight exchanges were:
- Trust exchange
When contacted for comment, the crypto exchanges, Alfa.exchange, Pridechange, Trust-exchange, Mychange and Suex did not answer.
24ExPay and Finex24 said they had no partners or offices in the UK, and denied receiving instructions to exchange funds in London.
Bitokk responded by saying it would review the research findings, but maintained that the company follows anti-money laundering procedures, as recommended by the Federal Action Task Force (FATF).
To counter misuse by criminals and terrorists, the FATF updated its travel rule standards in June 2022 to recommend exchanges (or virtual asset service providers) share relevant originator and payee information along with virtual asset transactions.
TI was founded in May 1993 by former World Bank employees, including Peter Elgan, who held the position of Regional Director.
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