The US Treasury Department announced sanctions against Russian national Ekaterina Zhdanova on 3 November for her role in laundering and moving funds using cryptocurrency on behalf of Russian elites.
According to the Treasury Department’s Office of Foreign Assets Control (OFAC), “This action is consistent with the G7’s commitment to crack down on sanctions evasion and closing loopholes that allow the Russian state, its elites, proxies, and oligarchs to leverage virtual currency to offset the impact of international sanctions.”
“Through key facilitators like Zhdanova, Russian elites, ransomware groups, and other illicit actors sought to evade US and international sanctions, particularly through the abuse of virtual currency,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
The Treasury Department states that in March 2022, Zhdanova assisted a Russian client in disguising their source of wealth to transfer over $2.3 million into Western Europe through a fraudulently opened investment account and real estate purchases.
Zhdanova allegedly uses cryptocurrency to facilitate large cross-border transactions, including through the OFAC-designated Russian cryptocurrency exchange Garantex. The Treasury Department says Garantex was known for disregarding anti-money laundering obligations.
In addition, Zhdanova also reportedly provided services to individuals connected with the Russian Ryuk ransomware group, laundering over $2.3 million in suspected ransom payments in 2021.
Furthermore, the Treasury Department notes that Zhdanova conducted virtual currency exchanges for oligarchs who relocated abroad and, in one case, sought to move over $100 million for a Russian oligarch to the UAE.
Additionally, the Treasury Department stated that Zhdanova utilizes entities lacking anti-money laundering controls, relies on cash transactions, and maintains access to the international financial system through a luxury watch company with global offices.
Zhdanova has been designated under an executive order targeting the Russian financial services sector. Her property in the US or controlled by US persons is now blocked.
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