Report: Moscow City exchanges help cash out USDT in the United Kingdom

Several cryptocurrency platforms operating in the Moscow City office complex provide anonymous cross-border transfers, including to the United Kingdom. This is stated in the отчете by Transparency International Russia.

According to experts, 21 cryptocurrency companies are based in Moscow City. Fourteen of them are over-the-counter brokers dealing in exchanging cash rubles for USDT. Eight platforms conduct stablecoin exchanges for British pounds with cash-out in London.

Among the latter is the cryptocurrency exchange Suex, in September 2021 due to links to ransomware developers. Although the Suex site is not operational, operators of the company’s Telegram chat still conduct exchange transactions, researchers say.

They managed to obtain wallet addresses of three of the eight crypto-exchanges facilitating transfers to the United Kingdom — Pridechange, Alfa.exchange and 24ExPay. Analyzing them, experts found that since inception through 14 December 2022, on average between $420,000 and $470,000 passed monthly through a single address.

Transparency International emphasised that they assessed only wallets holding USDT on the Tron network, as the Ethereum addresses obtained had zero or near-zero balances. In addition, each exchanger uses several wallets, so the actual amount of transfers may be significantly higher.

According to the Elliptic analytics tool, roughly 21% of Pridechange’s outgoing payments were sent to addresses associated with the US-sanctioned the Garantex exchange, also located in Moscow City.

“When we discussed the transfer of funds, we talked about sums exceeding $15 000, and for exchangers it was no problem to provide this cash in the United Kingdom on the same day. Based on the available evidence, large sums of funds may be sent abroad monthly with a minimal number of AML checks, if any are conducted at all,” said the Transparency International experts.

They added that there are several unregistered crypto exchanges operating in the United Kingdom, cashing out cryptocurrencies in circumvention of the law.

“The fact that clients can anonymously send cash from a country with such lax controls leaves the financial system open to exploitation by criminals and corrupt officials seeking to launder their proceeds,” the report says.

In March 2022, after currency operations were banned in Russia, the ‘black’ segment of the cryptocurrency market intensified. Since the start of the full-scale war in Ukraine, turnover of Moscow City exchangers has risen by at least fivefold. Meanwhile, the average earnings on deals rose from 0.1% to at least 1%.

According to Chainalysis, several dozen cryptocurrency firms in Moscow City are linked to laundering the proceeds of cybercriminals.

In February 2023, Sberbank recorded record volumes of illicit transfers of assets to overseas cryptocurrency wallets using Russian bitcoin exchanges.