Andrei Zvereva self-proclaimed Russian smuggler, has been using Tie USDT/USDa popular cryptocurrency, to facilitate transactions for the acquisition of high-tech equipment and weapons parts, helping Russian companies to circumvent Western sanctions.
What happened: Zverev, a broker for Russian companies, has been using Tether to facilitate transactions for the purchase of high-tech equipment and weapons parts, The Wall Street Journal reported. In one case, Zverev used Tether to transfer millions of dollars from Concern over KalashnikovRussia's largest small arms manufacturer, to an electronics distributor in Hong Kong.
Zverev wrote in a Telegram chat and has been using Tether to convert rubles into cryptocurrency and pay foreign suppliers in countries like China and the Middle East. This has allowed Russian companies to continue trading despite Western sanctions.
The US Treasury Department has been pushing for legislation that would allow it to block transactions in US dollar-denominated stablecoins like Tether. Recently, the department blacklisted a Moscow company that used Tether-based payments.
"Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue financing its war against Ukraine," Brian Nelsonthe Treasury undersecretary for terrorism and financial intelligence said in a statement.
Because it is important: The use of cryptocurrencies to evade sanctions and finance illicit activities is not new. North Korea, for example, has been stealing billions in cryptocurrency to finance their apocalyptic weapons. In response, the UN has been calling for stricter regulations on cryptocurrency transactions.
On the other hand, Russia has been taking steps to establish itself as a major player in the global cryptocurrency market. The country has announced plans to create a new global currency, establish specialized institutions for mining, and facilitate cross-border cryptocurrency transactions.
However, the use of cryptocurrencies for illicit activities has also raised concerns. Co-creator of Ethereum Vitalik Buterin has proposed using โprivacy groupsโ to improve the transparency and reliability from the cryptocurrency market and eliminate unscrupulous cryptocurrency traders.
Read next: Dogecoin jumps 15% ahead of Doge Day and whale transactions increase
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