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Sanctions Against Ekaterina Zhdanova
The US Treasury Department has sanctioned Ekaterina Zhdanova, a Russian national, over allegations of widespread money laundering and facilitating crypto transactions. Zhdanova is accused of aiding Russian elites in evading US and other international sanctions. As a result of the sanctions, all her property located within the US or under the control of US persons, is now blocked.
Role in Money Laundering
Zhdanova is believed to have played a pivotal role in laundering funds on behalf of Russian elites. According to the US Treasury Department, she has facilitated massive cross-border transactions, including cryptocurrency transactions, worth hundreds of millions of dollars. She faces accusations of laundering over $2.3 million in suspected ransom payments in 2021 alone. Zhdanova is also suspected of aiding the infamous Russian Ryuk ransomware group.
Methods Used for Money Laundering
The Treasury Department said Zhdanova facilitated large cross-border transactions using cryptocurrency, through the Russian cryptocurrency exchange Garantex, known for its disregard for anti-money laundering obligations. In a noted case in March 2022, Zhdanova reportedly assisted a Russian client to transfer over $2.3 million into Western Europe through a fraudulently created investment account and property purchases. To keep her operations running, Zhdanova utilizes companies with weak anti-money laundering controls, mainly deals in cash transactions, and maintains access to international financial systems through a luxury watch company with offices worldwide.
Aid to Russian Oligarchs
Zhdanova allegedly provided significant aid to Russian oligarchs. The US Treasury Department points out that she executed virtual currency exchanges for oligarchs who relocated abroad. In one such case, she helped an oligarch relocate over $100 million to the United Arab Emirates. Her activities have played a crucial role in allowing Russian elites to leverage virtual currencies to evade international sanctions.
Zhdanova’s Involvement in Ransomware Operations
Ekaterina Zhdanova's nefarious activities extend beyond money laundering for Russian elites. Notably, her involvement includes connections with the operations of dangerous ransomware groups. Her considerable contributions have significantly enabled such groups to successfully launder huge sums of ill-gotten funds.
Assistance to Ryuk Ransomware Affiliates
Zhdanova is specifically accused of assisting the Ryuk ransomware group in washing their ill-gotten gains. According to Treasury Department officials, she helped this particular group to launder an estimated $2.3 million in unlawfully obtained funds. This assistance allowed the Ryuk ransomware actors to evade detection and potential action from regulatory bodies, fortifying their ransomware operations.
Background Information on Ryuk Ransomware
The Ryuk ransomware group is a malicious collective notorious for its targetted ransomware attacks. These attacks involve infiltrating systems, encrypting the files therein, and then demanding a ransom for their decryption. In 2022, the group was recognized as a significant threat to U.S. healthcare facilities after carrying out a series of crippling ransomware attacks on US hospitals, revealing the breadth and intensity of their operations.
Connection to Denis Mihaqlovic Dubnikov
If available, information regarding Zhdanova's connection to Denis Mihaqlovic Dubnikov would be appropriate in this section. However, such information is not provided in the reference document.
Zhdanova’s Transactions for Russian Clients
Ekaterina Zhdanova's services extend well beyond the facilitation of cross-border virtual currency transactions. She is also accused of assisting Russian clients to make significant fund transfers, circumvent international financial regulations, and establish financial footholds in foreign countries.
Transfers Exceeding $100 Million to the United Arab Emirates
Zhdanova is alleged to have assisted a Russian oligarch in moving wealth exceeding $100 million to the United Arab Emirates (UAE). This translates to providing a gateway to foreign financial markets for individuals who might be barred from accessing them due to international sanctions imposed on Russia.
Provision of Tax Residency, Identification, and Bank Accounts
The Treasury Department also accuses Zhdanova of facilitating a tax residency service for Russian clients in the UAE. This service provides clients with UAE tax residency, an identification card, and a bank account, thereby enabling them full access to financial services in the UAE. This service may have been instrumental in helping her clients obscure their identities.
Payments Made to Foreign Bank Accounts
Payments for Zhdanova's services were often made in cash or virtual currency. Once the payments were received at a Dubai bank account, the funds were then transferred to foreign bank accounts as per the client's instructions. This kind of service offers a convenient way for clients to create an origin of funds that could be managed globally without raising suspicions from financial authorities.
Consequences of the Sanctions
The U.S. Treasury Department's sanctions against Ekaterina Zhdanova come with significant implications. These sanctions, while targeting an individual, also have far-reaching effects on entities associated with her, particularly those based in the United States.
Blocking of Property and Interests in the United States
Under the sanctions, all property and interests of Zhdanova that fall under U.S. jurisdiction are now blocked. This implies that any assets she owns or controls within the boundaries of the U.S. are effectively frozen. By extension, entities that are 50 percent or more owned by her or by any other designated individuals also have their assets blocked.
Prohibition of Transactions Between U.S. Entities and Zhdanova
As a consequence of the sanctions, U.S. entities and individuals are generally restricted from engaging in transactions with Zhdanova. This effectively severs her financial access to U.S. markets. Additionally, financial institutions or other persons engaging in transactions or activities with Zhdanova or any other sanctioned entities may expose themselves to further sanctions or be subject to enforcement actions.