Sanctioning a Russian Money Launderer

Sanctioning a Russian Money Launderer

The United States has sanctioned Ekaterina Zhdanova, a Russian national, for her role in laundering hundreds of millions of dollars using virtual currency on behalf of sanctioned Russian elites. Zhdanova has also provided a range of virtual, cash-based, tax residency and other services to Russian clients seeking to launder funds or obscure the sources of their wealth.

The sanctioning of Zhdanova highlights the consequences of supporting corrupt Kremlin proxies, underscores the United States’s efforts to address the abuse of virtual currency to launder illicit funds, and exposes an illicit actor’s money laundering activities.

“Through key facilitators like Zhdanova, Russian elites, ransomware groups, and other illicit actors sought to evade U.S. and international sanctions, particularly through the abuse of virtual currency,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson. “We remain focused on safeguarding the U.S. and international financial system against those who seek to exploit this technology, among other illicit finance risks in the virtual assets ecosystem.”

In response to Russia’s illegal invasion of Ukraine in February 2022, the Office of Foreign Assets Control has imposed economic sanctions on the Russian financial system. In March 2022, Zhdanova assisted a Russian client in obfuscating their source of wealth in order to transfer over $2.3 million into Western Europe through a fraudulently opened investment account and real estate purchases. This type of illicit financial activity can be used to evade U.S. and international sanctions that impose costs on Russia and deny the access of sanctioned Russian individuals and entities to the international financial system.

Zhdanova conducts virtual currency exchange transfers on behalf of oligarchs who have relocated internationally. In one instance, a Russian oligarch sought out Zhdanova to move over $100 million in wealth on their behalf to the United Arab Emirates.

Zhdanova also provided services to individuals connected with the Russian Ryuk ransomware group. In 2021, Zhdanova laundered over $2.3 million of suspected victim payments on behalf of a Ryuk ransomware affiliate.

The United States is committed to safeguarding the integrity of its financial system. “We will continue to use all available tools,” said State Department spokesperson Matthew Miller in a statement, “to target Russia-based cybercrime and counter the threat posed by ransomware in coordination with national and international partners.”