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She Was a Russian Socialite and Influencer. Cops Say She’s a Crypto Laundering Kingpin
- Ekaterina Zhdanova, a Russian socialite and entrepreneur, has allegedly been running a crypto money-laundering operation used by Russian oligarchs, ransomware gangs, and other criminals. She has now been hit with economic sanctions by the US government. Zhdanova has acted as the head of a sophisticated money-laundering network that swaps cash for cryptocurrency, using a broker in the United Arab Emirates, which has positioned itself as friendly to cryptocurrencies. The two alleged money-laundering networks—Smart Group, which officials say Zhdanova runs, and TGR Group, have their tentacles in more than 30 locations.
- The Smart Group is at the top of the funnel, dealing with money from Russians, plus directing cash exchanges involved in the layering, while TGR companies are often involved in integration. Investigators say the network uses Tether stable coin frequently, which is under investigation by the US government for the cryptocurrency’s potential to be used in money laundering and sanction violations.
- Since Russia’s full-scale invasion of Ukraine more than 1,000 days ago, the country’s economy has been hit by sanctions—and cryptocurrency payments are banned domestically. Money laundering plays a large role in getting around economic sanctions. By its very design, laundering is vastly complex and deceptive—and that can be exaggerated when crypto is used. Vast sums of crypto being shuttled between digital wallets can be traced, but it is not as blatant as stuffing thousands of bank notes into gym bags.
- The two money-laundering networks are helping Russian elites to use their money outside of Russia and are perfect for evading sanctions. The UK and London, in particular, have long been a home to dirty money and laundering, with cryptocurrencies apparently increasingly being linked to cash in the capital. Operation Destabilise has led to 84 arrests, with more than £20 million of cash and crypto being seized by UK law enforcement. More than 30 locations are involved.
- Investigators believe Zhdanova may have split time in recent years between Russia and the UAE. A review of available material from data breaches provided by Constella Intelligence shows Zhdanova’s Gmail address, which was previously published by OFAC, is the last seven digits of her phone number, and is linked to a Telegram account called Smart Group.
- George Rossi and TGR are allegedly involved in integrating money into financial networks. OFAC announced sanctions against the founder, as well as Elena Chirkinyan and Andrej Bradens, both of whom work for TGR—Chirkinyan is described as Rossi’s 'second in command.' Both networks have copied techniques from traditional laundering processes, but using crypto means they don’t have to worry about banks detecting the activity and freezing payments.
- Over a 74-day period, Semen Kuksov and Andrii Dzektsa helped launder £12.3 million, while investigators followed a van from Kensington, in London. Bags removed from it contained more than £200,000. Over the course of the same week, two addresses contained around £800,000 in cash.
- The Smart Group, allegedly run by Zhdanova, coordinates with cash handlers in European cities. The network could arrange for Russian cybercriminals with cryptocurrency to exchange it for cash held by a drug gang in the UK before the money is further laundered. 'What TGR will do is provide an interface to be able to take illicitly generated cash and put it into the legitimate banking system,' says Will Lyne, head of cyber intelligence at the NCA.
- While both TGR and the Smart Group are separate but linked entities, there may be times where they work together using 'each other’s specific capabilities' for those they work on behalf of, a senior NCA official reveals.
- The UK, and London in particular, have long been a home to dirty money and laundering, with cryptocurrencies increasingly linked to cash in the capital. More arrests have taken place and the risk of laundering has risen. With Zhdanova in French custody and legal cases ongoing, many details about the total money movements in recent years remain unknown.
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