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USDT in the Shadows: Russian Smugglers Use Crypto to Evade Western Sanctions

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Russian intermediaries are reportedly navigating the complex web of sanctions imposed by the West, leveraging cryptocurrencies like Tether’s USDT. They are allegedly using USDT to secure vital components for military hardware.

Central to this narrative is the case of Andrey Zverev, a self-proclaimed Russian smuggler based in China, who orchestrated a significant transaction for Russia’s arms manufacturer, known globally for the AK-47 rifle.

How Russia Uses Crypto to Bypass Sanctions

In 2022, Zverev acquired electronic drone parts, crucial for Russia’s military efforts in Ukraine. He bypassed traditional banking, using a Hong Kong distributor.

This move evaded the scrutiny of sanctions-wary financial institutions. According to the Wall Street Journal (WSJ), Zverev chose USDT, a cryptocurrency, for this untraceable transaction.

Tether’s stablecoin, tied to the US dollar, often faces allegations of being infamous in black-market trades. Its daily volumes often surpass those of Bitcoin, signifying its role in clandestine financial activities. In 2023, Tether’s transactions neared $10 trillion, challenging major financial entities like Visa.

Russian entities allegedly use Tether to circumvent Western sanctions, procuring dual-use goods for military technology. This involves converting rubles into USDT and paying foreign suppliers, thus avoiding detection. The US Treasury has urged for laws to block such cryptocurrency transactions, aiming to uphold sanction efficacy.

“Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to fund its war against Ukraine,” Brian Nelson, the US Department of the Treasur

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Author: Harsh Notariya

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