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US and UK investigate Russian cryptocurrency transactions worth $20 billion - Bloomberg

US and UK investigate Russian cryptocurrency transactions worth $20 billion - Bloomberg File photo: The US and Britain are investigating Russian cryptocurrency transactions worth $20 billion (Getty Images)

The US and UK have begun scrutinizing cryptocurrency transactions totaling over $20 billion that have passed through a Russian exchange, reports Bloomberg.

It is noted that payments were processed through the Moscow-based cryptocurrency exchange Garantex using the Tether cryptocurrency, which is pegged to the dollar.

The source states that these transfers occurred after Garantex was sanctioned by the US and UK for suspected involvement in financial crimes and illicit operations in Russia.

"The Biden administration has been attempting to squeeze crypto exchanges like Garantex since the early days of the war. The $20 billion of transactions would represent one of the biggest breaches of the sanctions imposed on Russia since its start," the material says.

What is known about cryptocurrency

The sources have warned that investigations are ongoing, and it is still too early to draw conclusions due to the complexity and opacity of cryptocurrency transactions.

Tether is a stablecoin whose goal is to maintain a one-to-one value ratio with the dollar. This cryptocurrency is the most widely traded in the world, with a circulation of coins totaling over $100 billion.

Previously, the Garantex exchange stated that it aims to prevent the use of its platform for illegal activities and actively cooperated with the authorities of Europe and the USA until sanctions were imposed on it.

What the US authorities blamed the stock exchange for

Garantex was founded in 2019 in Estonia, although the US government claimed that the majority of its operations are currently based in Moscow. Estonia lost its license to operate in the country in February 2022 as a result of coordinated efforts with the US.

The US Department of the Treasury accused Garantex of disregarding its obligations to combat money laundering and terrorism financing, while simultaneously announcing its own sanctions against the firm in April 2022.

The US linked Garantex to transactions involving illegal activities totaling over $100 million, including those facilitated by a Russian hacker group known as Conti.

Tether is used by scammers

On its website, Garantex announces that it enables fund withdrawals through cards from PJSC Sberbank of Russia, PJSC Tinkoff Bank, and PJSC Alfa-Bank. These are Russian banks that have been sanctioned by the US.

The anonymity, speed, and stability of Tether have made the currency popular among criminals.

Tether was the most frequently used stablecoin for criminal activity in the cryptocurrency space last year, linking it to illegal transactions totaling $19.3 billion in 2023.

US pressures cryptocurrency exchanges assisting Russia

In May of last year, it was reported that the US Department of Justice was investigating Binance's involvement in assisting Russians in circumventing sanctions. It is suspected that the world's largest cryptocurrency exchange was helping Russian citizens transfer money.

Recently, the US imposed sanctions on Russian companies operating in the virtual payments sector. They were assisting Russia in circumventing sanctions.