One of the reasons regulators don’t like crypto transactions is anonymity. For example, with crypto mixers such as Tornado Cash, crypto users can send and receive money without compromising their personal information.
Unfortunately, this system also allows criminals to evade the authorities, especially when transferring money by illegal means. That is why many regulators in various countries are implementing strict Anti-Money Laundering (AML) laws and Know Your Customer (KYC) measures.
But it seems that setting the law isn’t enough if crypto exchanges don’t do their part to enforce it. Recent reports have revealed that some crypto exchanges in Russia are accepting money laundering for taking USDT and giving GBP in London.
Eight Crypto Exchanges In Russia Avoid UK AML, TI
In a recent investigation by International Transparency, eight crypto exchanges based in Moscow have indicated their willingness to support money laundering efforts. The researchers exchanged telegram messages with the exchange, even stating the large amount involved in the transaction, but did not tire. The exchange is ready to accept USDT in Moscow City and give GBP money to contacts in London.
At report, TI notes that Moscow City has many vendors and service companies to meet the different needs of visitors. So, you can find crypto exchanges in Moscow City that are willing to help their customers transfer money out of the country.
Since citizens cannot use Russian-issued cards abroad, they rely on other methods to transfer funds to other countries and earn money there. That is why crypto has become a better alternative, because no one questions the source of the buyer’s income during the transaction.
So researchers focused on finding crypto exchanges that accept cash, stablecoin exchanges, and those willing to buy stablecoins in Russia and offer cash abroad. The main focus stablecoin is USDT because it is free from price volatility.
After determining the target, TI searched online and found 21 exchanges located in Moscow City. Then check the exchanges and find 14 over-the-counter (OTC) brokers. After many discussions with exchanges, Transparency International found that 8 out of 21 are ready to exchange USDT for GBP cash in London.
The eight digital asset exchanges listed in the report are Pridechange, Bitokk, Alfa Exchange, Suex, Finex24, Mychange, Trust Exchange, and 24expay. Transparency International also provides links to their respective websites in the report. It also stated that OFAC sanctioned the Suex exchange in 2021 for facilitating transactions for ransomware hackers. As a result, the website is currently down.
UK Crypto Regulations
Digital businesses in the UK have operations in anti-money laundering rule from 2020. According to UK regulations, crypto companies fall under the jurisdiction of the Financial Conduct Authority (FCA). The agency is primarily focused on monitoring digital assets for AML. However, digital asset businesses are not under the FCA but handling large sums of money must register Revenue and Customs (HMRC).
The purpose of implementing these laws in the UK crypto industry is to avoid cases of money laundering, as is the case today. In particular, when TI asked this exchange about agreeing to facilitate money laundering, 24expay refused to offer such services and did not have an office in London.
On the other hand, Bitokk states that it complies with AML laws in its transactions as recommended by the FATF. Finex24 still has no UK counterpart and has never exchanged crypto for GBP. He also disclosed that the company is registered in Lithuania and is cooperating with AML officers.
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