suspicious movements in Russia and UK

According to a recent report by the organization “Transparency International Russia”, there have been frequent cases of money laundering between Russia and the UK through the illegitimate use of crypto and digital payments.

The research highlights the vulnerability of institutions that find themselves having to face an increasingly expanding phenomenon, despite the AML control numbers.

A wide range of financial companies execute substantial movements of electronic money through multiple corporate accounts and off-shore entities, making supervision by the competent authorities complex.
Let’s see all the details below.

Some regulatory gaps facilitate money laundering between Russia and the UK

According to Transparency International Russia, the criminal relations between Russia and the UK are intensifying thanks to the crypto that facilitate money laundering between the two countries.

In the latest report: “Unraveling the Web: Money Laundering through E-Payments from Russia to the UK” it appears quite evident how these illicit activities are becoming increasingly sophisticated.

In particular, the gaps in regulations on e-payments between Russia and the United Kingdom create a fertile ground for the expansion of the money laundering phenomenon.

Despite the strict “Anti Money Laundering” (AML) procedures, activities of this type persist and evolve as controls increase.

The report insists on the need for greater international cooperation and regulatory oversight regarding financial crimes.

The harmonization of regulatory standards and the collaboration between the United Kingdom, Russia, and UE are essential to bridge these gaps

 In this regard, it seems that something is slowly moving: the following chart shows the statistics regarding the number of electronic money institutions (EMI) and Payment Institution (PI) licenses issued, withdrawn, or canceled in the UK.

In the period 2018-2023, there was a significant increase in the withdrawal of EMI licenses, while several scandals related to the banking sector erupted in the country.

The authorities are adopting a more rigorous approach in this regard, pushing financial institutions to review the request for licenses. This could partially limit the flows of money laundering but even more rigorous surveillance is needed and the implementation of a regulation that limits this phenomenon.

Source: https://ti-russia.org/blog/tenevye-potoki/

E-payments and money flows in crypto between different financial platforms

The report identifies several platforms that exploit electronic payments in crypto to facilitate illicit money laundering flows between Russia and the UK.

The regulatory gaps we were discussing earlier translate into the facilitation of electronic commerce for a wide range of business accounts.

These, unlike the accounts of individual legal entities, are not subject to the same transaction amount limits and therefore allow for easier exchange of potentially “dirty” money.

In the form of legitimate entities on paper, istituti del genere diventano veicoli perfetti per il riciclaggio, using electronic coins and crypto

Companies like Payrow, Paysend, ANNA Business, and Gemba Finance present, according to Transparency International Russia, numerous vulnerabilities in this regard.

These platforms often operate through complex corporate structures and offshore entities, facilitating illicit financial flows

In all this, the involvement of politically exposed persons (PEP) and high-risk connections make the phenomenon even more serious.

The presence of the vast Russian network of PPE, businessmen, and cybercriminals could negatively impact the integrity of the entire European market.

Money laundering could reach a large scale, creating a strong negative impact in multiple EU countries.

Several experts in financial crimes are now wondering if the “Financial Conduct Authority” (FCA) of the United Kingdom has adopted an approach that is too permissive.

The federal entity in an attempt to reduce bureaucracy for the emerging market of electronic payments has allowed the expansion of illicit cross-border financial flows.

The role of the Dark Web in illicit markets

In the midst of the wave of financial flows in crypto between Russia and the UK that facilitate the phenomenon of money laundering, dark markets play a crucial role.

Very often, in fact, in the online black markets, verified UK business accounts are sold, with which criminals carry out illicit exchanges in electronic currency.

The lack of transaction limits for these entities favors a thriving market of fictitious identities, obviously fueled by the use of crypto.

These accounts allow large-scale money laundering operations by criminals using authentic identity documents.

Below is a chat from the dark markets between the account provider Gemba Finance and a client, revealed in the report by Transparency International Russia.

Very interesting how in this case the provider does not accept to sell EU accounts to customers residing in Russia and Ukraine.

The cost for this service is 1400 dollars and apparently it could easily favor the flow of hundreds of thousands of dollars per week from a Hong Kong company to a UK one.

Source: https://ti-russia.org/blog/tenevye-potoki/

In addition to facilitating money laundering, dark markets can offer several advantages to a wide range of unreliable actors.

A few months ago, for example, several KYC data of Binance users were put up for sale on the dark web. This data can be used to carry out real scams to the detriment of less experienced users.