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HomeLaw & PoliticsUS and UK Investigate $20 Billion in Crypto Transfers to Russian Exchange

US and UK Investigate $20 Billion in Crypto Transfers to Russian Exchange

The United States and the United Kingdom are currently investigating a series of cryptocurrency transactions that have traversed a Russian-based virtual currency exchange, amounting to over $20 billion. This investigation, as reported by Bloomberg on March 28, scrutinizes the financial activities conducted through Garantex, a Russian-based exchange group. These transactions were primarily executed using Tether, a cryptocurrency pegged to the US dollar. The focus on Garantex arises from suspicions that it has facilitated financial crimes and illicit transfers to Russia, prompting sanctions from the U.S. and U.K.

The backdrop of this investigation is the extensive sanction regime that Western countries have implemented against Russia and its affiliates, following the outbreak of the full-scale invasion of Ukraine. These sanctions aim to cut off revenue streams that are believed to support the ongoing war efforts. In a more recent development, the European Union expanded its sanctions to include 106 individuals and 88 entities directly involved in Russia’s aggression against Ukraine. This expansion includes companies across various countries, such as India, Sri Lanka, China, Serbia, Kazakhstan, Thailand, and Turkey, broadening the international scope of the sanctions.

Additionally, the EU has tightened export restrictions on dual-use goods and technologies that could potentially advance Russia’s military technological capabilities. Specific measures have been introduced to restrict the export of components used in drone development and production, highlighting a strategic approach to curb military advancements.

Since the beginning of the invasion in February 2022, Ukraine’s allies have successfully frozen approximately $300 billion in Russian assets. There is an ongoing discussion among European leaders and allies regarding the utilization of these frozen assets to support Ukraine’s reconstruction efforts post-war. Although the legality of reallocating these funds for Ukraine’s benefit remains a contentious issue, the increasing delays in U.S. military aid to Ukraine have intensified the urgency to find viable solutions to support Ukraine through the existing financial sanctions and asset freezes. This investigation into the cryptocurrency transactions underscores the concerted efforts by the U.S., U.K., and their allies to thwart financial avenues that may indirectly support the war in Ukraine.

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