Tag Archives: cryptocurrencies for money laundering

Hands tearing apart a chain made from dollar bills

How A7 Plans to Liberate the Slaves of the West

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Russia’s war effort in Ukraine might be faltering, but the Kremlin has a high-tech superweapon to neutralize Western sanctions. It is called A7. The state-backed payment network moves money in and out of Russia, defying U.S. and European efforts to isolate Moscow from the global banking system. A7 helps Russia pay for everything from military-drone parts to luxury cars to imported fruit, using a mix of cryptocurrency transactions and more-traditional banking methods…Behind its rapid rise is a convicted money launderer. A7’s founder, Ilan Shor, is best known for his role in one of the biggest bank heists in history: a complex scheme to extract $1 billion from three banks in Moldova, one of Europe’s poorest countries, in 2014. A Moldovan court convicted him of fraud and money laundering for helping orchestrate the theft, but he fled the country while under house arrest. Shor has denied the allegations and called them politically motivated…

Founded less than two years ago, A7 says it handles nearly 20% of payments in Russian foreign trade, or more than $100 billion annually. President Vladimir Putin gave it his blessing in 2025, taking part by video link in the opening of an A7 branch office. Now, A7 is planning to take its services global and fulfill Putin’s vision of an alternative financial system outside the control of Washington or Brussels. Having recently opened its first offices abroad, in Nigeria and Zimbabwe, A7 says it is eyeing expansion into Latin America and the Middle East. Executives don’t hide their desire to serve countries seen as pariahs in the West. “Before, the Western system essentially enslaved the whole financial world, allowing the West to flip a switch at any time and stop any country from being able to make payments,” Shor told TASS, the Russian state news agency, in July 2026. “We give companies and countries freedom, because our system is immune to sanctions.” The U.S., U.K. and European Union have all sanctioned A7.

To skirt sanctions, A7 moves money through a network of shell companies in places such as Kyrgyzstan, Hong Kong and the United Arab Emirates, according to the Open Source Centre…Crypto is the other main tool that A7 uses, allowing it to bypass banks entirely. A7 backed the 2025 launch of A7A5, a digital token pegged to the value of Russia’s currency, the ruble. Blockchain analysts say A7A5 is used to pay for sanctioned goods by swapping it for U.S. dollar-backed stablecoins, such as Tether. More than $2.2 billion has moved through one such A7A5 swapping service,,,

Excerpt from Alexander Osipovich, Russia’s Hottest Startup Is a State-Backed Sanctions Evasion Network, WSJ, Aug. 7, 2026

Is Iran’s Crypto Economy Safe? Crypto’s Deceitful Name

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Iran’s demand that oil tankers pay transit tolls in cryptocurrency for passing through the Strait of Hormuz has cast a new light on the country’s $7.8 billion crypto economy and the role digital currencies play for regimes operating outside the mainstream financial system…The situation in Iran echoes that of Venezuela, where the stablecoin tether serves as both a tool for the state-run oil industry to circumvent sanctions and a lifeline for everyday people struggling against a devaluing currency, the bolivar.

The paramilitary Islamic Revolutionary Guard Corps has been among the most active users on Iran’s cryptocurrency market, often straining the country’s scarce electricity resources to mine bitcoin…Bitcoin isn’t the only cryptocurrency used by the Iranian regime. The Central Bank of Iran has acquired at least $507 million of tether—the world’s largest stablecoin pegged to the U.S. dollar—in an apparent bid to prop up the domestic currency and settle international tradet.

In the months leading up to the war, Iranians had increasingly migrated their bitcoin holdings from local crypto exchanges to their personal wallets, fearing state-imposed internet blackouts and financial seizures during domestic protests. And two days after the February 2026 airstrikes, total exchange outflows had reached about 10.3 million.. A 700% surge in outflows from Nobitex, Iran’s largest crypto exchange, within minutes of the initial U.S.-Israeli attacks on Iran. The exodus suggests that the people were withdrawing their funds and sending them to overseas crypto exchanges that typically draw tokens from Iranian accounts during moments of instability…. With more than 11 million users, Nobitex is the primary gateway for Iranian citizens to swap rials for tether, which they can convert into other currencies abroad. Last year, a pro-Israel hacking group called “Predatory Sparrow” drained more than $90 million from Nobitex. U.S. regulators have targeted Iran’s digital infrastructure before. In January 2026, the U.S. Treasury Department’s Office of Foreign Assets Control sanctioned two U.K.-registered crypto exchanges, Zedcex and Zedxion, for facilitating approximately $1 billion in transactions linked to the IRGC, according to TRM Labs.

Excerpt from Vicky Ge Huang, Iran’s $7.8 Billion Crypto Economy Finds New Way to Grow After Cease-Fire, WSJ, Apr. 9, 2026

The Trump-China Hidden Romance: the companies behind USD1

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The Trump family’s crypto venture has generated more wealth since the election—some $4.5 billion—than any other part of the president’s business empire.

A major reason for the success is a partnership with an under-the-radar trading platform quietly administered by Binance, the world’s largest crypto exchange, whose founder is seeking a pardon from President Trump…The online trading platform, PancakeSwap, serves as an incubator of sorts, drumming up interest among traders to use coins issued by the Trump family’s main crypto company, World Liberty Financial.  The more World Liberty’s flagship coin, USD1, is used, the greater demand to increase its circulation, and the greater the profit for World Liberty and its owners, including the Trump family. 

Crypto trading platforms, like PancakeSwap, often offer rewards or prizes to drum up interest in new coins, similar to the way brokerages offer free trades or casinos give first-time customers free chips…

Binance’s majority owner and founder, Changpeng Zhao, spent four months in jail in the U.S. last year after Binance agreed to pay a $4.3 billion fine for becoming a global money-laundering hub for criminals, terrorists and sanctions evaders. His company has deepened its relationship with World Liberty at the same time Zhao has ramped up efforts to secure a pardon from Trump…Zhao—considered the richest person in the crypto industry and worth over $70 billion.

USD1 got its first big break when Binance accepted a $2 billion investment from an outside investor paid in the World Liberty coin. The deal caused the amount of the cryptocurrency in circulation to erupt 15-fold and overnight become one of the world’s largest.  USD1 is what is known as a stablecoin, a privately invented digital currency that is backed 1:1 with U.S. dollars. World Liberty invests the money backing the coin in government bonds and money-market funds, without paying interest to users of the coin. With more than $2 billion of USD1 in circulation, it can earn around $80 million a year based on current interest rates. Binance has been holding the $2 billion in USD1 on its platform…By not cashing in the stablecoin, this ensures that World Liberty continues to earn money from investing the dollars that back them.

World Liberty’s relationship with PancakeSwap, whose website was registered in Shanghai, and Binance is one of several in which entities and individuals with strong ties to China have supported the Trump family crypto business. One of World Liberty’s largest investors is Justin Sun, the Hong Kong-based billionaire…This comes even as the White House pushes a trade war against China and seeks to curtail U.S. corporations’ ties to the country over national-security fears…

China is Binance’s largest market by trading volume. It has been a main base for its software developers, with hundreds of coders…Binance has long maintained that it isn’t a Chinese company, saying it left Shanghai shortly after its 2017 launch. Zhao… has said he is no longer a Chinese citizen, and holds Canadian and United Arab Emirates citizenship. The company, which has employees around the world, doesn’t have an official headquarters…

PancakeSwap doesn’t disclose its ownership…According to former Binance employees, Binance staff created PancakeSwap in-house in 2020 because the exchange wanted to establish a foothold in crypto’s so-called decentralized finance craze. The platform has remained under Binance’s supervision…

Excerpt from Angus Berwick et al., The Recipe Behind the Trump Family’s Crypto Riches: PancakeSwap, WSJ, Aug. 12, 2025

The Magic of Tether: Why the United States Tolerates Tether Land?

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A giant unregulated currency is undermining America’s fight against arms dealers, sanctions busters and scammers. Almost as much money flowed through its network in 2024 as through Visa cards. And it has recently minted more profit than BlackRock, with a tiny fraction of the workforce. Its name: tether. The cryptocurrency has grown into an important cog in the global financial system, with as much as $190 billion changing hands daily. In essence, tether is a digital U.S. dollar—though one privately controlled in the British Virgin Islands by a secretive crew of owners, with its activities largely hidden from governments.  Known as a stablecoin for its 1:1 peg to the dollar, tether gained early use among crypto aficionados. But it has spread deep into the financial underworld, enabling a parallel economy that operates beyond the reach of U.S. law enforcement. Wherever the U.S. government has restricted access to the dollar financial system—Iran, Venezuela, Russia—tether thrives as a sort of incognito dollar used to move money across borders.

Russian oligarchs and weapons dealers shuttle tether abroad to buy property and pay suppliers for sanctioned goods. Venezuela’s sanctioned state oil firm takes payment in tether for cargoes. Drug cartels, fraud rings and terrorist groups such as Hamas use it to launder income. Yet in dysfunctional economies such as Argentina and Turkey, beset by hyperinflation and a shortage of hard currency, tether is also a lifeline for people who use it for quotidian payments and as a way to protect their savings.

Tether is arguably the first successful real-world product to emerge from the cryptocurrency revolution that began over a decade ago. It has made its owners immensely rich. Tether has $120 billion in assets, mostly risk-free U.S. Treasury bills, along with positions in bitcoin and gold. Last year it generated $6.2 billion in profit, out-earning BlackRock, the world’s largest asset manager, by $700 million.

The company behind tether, Tether Holdings, issues the virtual coins to a select group of direct customers, mostly trading firms, who wire real-world dollars in exchange. Tether uses those dollars to purchase assets, mostly U.S. Treasurys, that back the coin’s value. Once in the wider market, tether can be traded for other tokens or traditional currencies through exchanges and local brokerages. In Iran, for example, a crypto exchange called TetherLand allows Iranians to swap rials into tether. Tether vets the identities of its direct customers, but much of its vast secondary market goes unpoliced. The tokens can be pinged near-instantaneously along chains of digital wallets to obfuscate the source. A United Nations report in January 2024 said tether was “a preferred choice” for Southeast Asian money launderers. 

The company says it can track every transaction on public blockchain ledgers and can seize and destroy tether held in any wallet. But freezing wallets is a game of Whac-A-Mole. Between 2018 and this June, Tether blacklisted 2,713 wallets on its two most popular blockchains that had received a total of about $153 billion, according to crypto data provider ChainArgos. Of that massive sum, Tether could only freeze $1.4 billion because the rest of the funds had already been sent on.

Excerpts from Angus Berwick & Ben Foldy, The Shadow Dollar That’s Fueling the Financial Underworld, WSJ, Sept. 10, 2024

How Binance Hijacked the Central Bank of Nigeria

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Tigran Gambaryan, Binance’s head of financial-crime compliance, flew to Nigeria’s capital to solve a problem: The government had blamed the world’s largest crypto exchange for crashing the currency… He hasn’t come back. Nigerian authorities detained Gambaryan and a colleague, Nadeem Anjarwalla, a U.K. and Kenyan national and Binance’s regional manager for Africa, according to the men’s families. The Binance employees, who are being held in a guarded house, haven’t been charged with any crimes. The government, which invited them to Nigeria for meetings, hasn’t publicly discussed the detentions. 

Nigeria, Africa’s largest economy with a population of more than 220 million, has faced many currency crises before. This is the first time that crypto has played a starring role.
Nigerians flocked to cryptocurrencies in recent years to shelter their savings from a soaring inflation rate, which hit nearly 30% in January, and a plunging currency, one of the worst-performing in the world this year. Two-thirds of the population lives in poverty.  The country has the second-highest adoption of crypto in the world, after India, according to an index compiled by Chainalysis, a data provider. Nigerians received about $60 billion worth of crypto transactions in the 12 months through June 2023, according to Chainalysis. 

Because the government rationed who could exchange the local currency for the dollar and at what exchange rate, many sought refuge in digital currencies pegged to the U.S. dollar, known as stablecoins.  The stablecoin trade in essence became a black market, displaying an unofficial exchange rate between the local currency, the naira, and the dollar that was much weaker than the government’s rates. Binance, the most popular exchange, became the go-to place to check that black-market rate, according to currency traders. Bayo Onanuga, a special adviser to the Nigerian president, accused Binance of setting the exchange rate for Nigeria and hijacking the role of the central bank…A persistent gap between what the government thought the currency was worth, and the rate on Binance’s website, proved intolerable.  Onanuga told The Wall Street Journal that Binance was cooperating with authorities and compensation to Nigeria was being discussed.

Binance said it would stop any services involving the naira, dealing a blow to its efforts to rebuild its business in fast-growing emerging markets. The Nigerian Communications Commission ordered telecommunications companies to restrict access to the websites of Binance and other crypto platforms.  Olayemi Cardoso, the head of Nigeria’s central bank, suggested that crypto platforms were being used to manipulate the market. In the case of Binance, he said, $26 billion had passed through its platform in Nigeria in 2023 from sources and users whom the central bank couldn’t adequately identify. He didn’t say where the figure came from…

Founded in 2017 in China, Binance has a history of drawing the ire of governments. It has long operated without a headquarters and under the radar of regulators, offering unlicensed trading through its global website. In November 2023, Binance founder Changpeng Zhao stepped down as chief executive and pleaded guilty to violating U.S. anti-money-laundering requirements. The company agreed to pay $4.3 billion in fines, the largest ever levied on a crypto firm. Zhao is currently awaiting sentencing in the U.S. 

The use of cryptocurrencies tied to the U.S. dollar has ballooned in countries across the developing world. In economies under financial stress where actual dollars are scarce, such as Turkey, Argentina and Russia, locals have turned to crypto exchanges and the dollar-like digital currencies they offer as an alternative.

Excerpts from Patricia Kowsmann et al., Crypto Gets Blamed for a Real-Life Currency Crisis, WSJ, Mar. 12, 2024