The United Kingdom National Crime Agency (NCA) recently announced that it has disrupted Russian money laundering operations involving cryptocurrencies. As a result of the operation, 84 arrests have been made and over $25.5 million (£20 million) in cash and cryptocurrency have been seized. The investigation also led to the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposing sanctions on Russian-speaking individuals and four businesses involved in sanction-evasion networks.
The operation, known as “Operation Destabilise,” was not limited to the UK and included actions taken in the Middle East, Russia, and South America. Byron Boston, CEO of crypto tracking firm Crypto Track and a former police officer in Dallas, United States, commented on the challenges faced in cryptocurrency investigations due to inconsistent international regulation and cooperation.
Boston provided an example of assisting the United States Department of Homeland Security in investigating $1 million of laundered cryptocurrency. While the international exchange involved was identified, the exchange requested a mutual legal assistance treaty to release the relevant data, resulting in delays and potential loss of funds.
The announcement did not specify the extent to which the uncovered money laundering networks, namely Smart and TGR, relied on cryptocurrencies for their operations. However, it explained that the operators often used cryptocurrency for cash transactions to move funds between countries after collecting them in one country.
Slava Demchuk, CEO of crypto compliance and forensics firm AMLBot, emphasized the importance of fast information sharing with compliant over-the-counter (OTC) trading desks and quick sanctioning to prevent criminals from obfuscating on-chain traces.
The UK was identified as a hub for such operations, with exchanges taking place on a large scale across the country. Criminal groups reportedly used cryptocurrency to reinvest in illicit activities, such as purchasing drugs or firearms, without the need to physically move money across borders.
Edited by Stacy Elliott.