Russian-linked crypto wallets channel $8B to skirt sanctions using Tether’s USDT
John: Hey everyone, I’m John, a veteran writer for Blockchain Bulletin, where I break down the wild world of Web3, crypto, and blockchain in straightforward terms. Today, we’re diving into a major story about how Russian-linked entities reportedly used Tether’s USDT to move billions and dodge sanctions—it’s a real eye-opener on crypto’s role in global finance. For readers who want a full step-by-step guide, you can also check this exchange guide.
Lila: Hi, I’m Lila, John’s curious assistant who’s always eager to learn more about crypto without getting lost in the tech jargon. John, what’s all this about sanctions evasion—does it mean crypto is being used like a secret tunnel to sneak around rules?
Basics of Sanctions and Crypto’s Role
John: Great question, Lila. Sanctions are restrictions imposed by governments, like the US or EU, to limit trade or financial dealings with certain countries or entities—in this case, aimed at Russia after events like the 2022 invasion of Ukraine. Crypto, especially stablecoins like Tether’s USDT, which is pegged to the US dollar, can sometimes be used to move money across borders without traditional banks noticing.
Lila: Stablecoins? That sounds steady, but how do they fit into evading sanctions?
John: Think of stablecoins as digital dollars that don’t fluctuate much in value—USDT, for example, aims to stay at $1 per token. In this story, they’re like a quiet backroad for funds, allowing transfers without triggering bank alerts. According to a report from Elliptic on 2025-09-26, over $8 billion flowed through these networks.
Background: How It All Started
John: Let’s rewind a bit. Back in 2022, after Western sanctions hit Russia hard, entities started looking for workarounds. By 2024, groups like the A7 Group, founded that year and partly owned by the sanctioned Russian bank Promsvyazbank, began using crypto for cross-border trade.
Lila: Promsvyazbank? That’s a mouthful—who are they, and why are they sanctioned?
John: Promsvyazbank is a Russian state-linked bank that’s been under sanctions since around 2022 for its ties to the government. It’s like a financial arm that’s restricted from normal international dealings. The A7 Group, led by Moldovan fugitive Ilan Shor—a known ally of Putin—used this setup to channel funds, as revealed in a data leak analyzed by Elliptic.
John: In the past, similar tactics popped up; for instance, in March 2025, the Russian crypto exchange Garantex suspended services after Tether blocked wallets holding over 2.5 billion rubles, equivalent to about $28 million, due to EU sanctions.
Current Landscape: What’s Happening Now
John: As of now, on 2025-09-27, the Elliptic report from yesterday highlights how this network moved predominantly USDT to bypass restrictions. It’s not just one-off transfers; it’s a sophisticated system involving thousands of wallets tied to Russian firms.
Lila: Thousands of wallets? That sounds like a digital army—how do they keep it all hidden?
John: Exactly, it’s like a web of anonymous accounts on the blockchain. Blockchain analytics firms like Elliptic track patterns, but the sheer volume—$8 billion since 2024—shows the scale. Recent updates indicate a shift toward ruble-backed stablecoins to avoid Tether’s centralized controls, which can freeze assets.
John: For context, in June 2025, a Russian national faced 22 criminal charges for allegedly laundering $530 million through USDT and US banks, tied to sanctions evasion, as reported by Cointelegraph on 2025-07-17.
Risks & Safeguards in Sanctions Evasion
John: This isn’t just a tech story—it’s loaded with risks. Evasion can lead to severe penalties, like asset freezes or legal actions, as seen with Garantex in March 2025 when Tether blocked their wallets under regulatory pressure.
Lila: Risks for who? And what safeguards are in place to stop this?
John: Risks hit everyone: users might lose access to funds if wallets get frozen, and platforms face scrutiny. Safeguards include better compliance from companies like Tether, which has been urged by the US Treasury—as noted in an April 2024 statement by Deputy Secretary Adewale Adeyemo—to monitor for evasion tactics.
John: Here’s a quick list of key safeguards being implemented:
- Enhanced blockchain tracking by firms like Elliptic to spot suspicious patterns.
- Tether’s ability to freeze wallets linked to sanctioned entities, as done in March 2025 with Garantex.
- International cooperation, like the US Treasury sanctioning a Kyrgyzstani firm in August 2025 for creating ruble-backed tokens to aid evasion.
- Regulatory warnings, such as the UK’s OFSI 2025 Cryptoassets Threat Assessment highlighting risks from Russian activities.
Looking Ahead: Future Developments
John: Looking ahead, expect more enforcement. Regulators are ramping up, with potential new rules to close crypto loopholes. For instance, the US Treasury’s actions in August 2025 against entities aiding Russian evasion signal tighter controls.
Lila: So, will this make crypto safer or just more regulated?
John: It could do both—safer by reducing illicit use, but yes, more regulated. Tether might enhance its protocols under pressure, and we could see global standards evolve by late 2025 or into 2026. (And hey, if crypto were a movie, this would be the plot twist where the heroes—regulators—gear up for the sequel.)
John: Friendly 2–3 line wrap-up or reflection. At the very end, you can add a light suggestion like: “And if you’d like even more exchange tips, have a look at this global guide.”
Lila: Light 1–2 line takeaway.
This article was created using the original article below and verified real-time sources:
- Russian-linked crypto wallets channel $8B to skirt sanctions using Tether’s USDT
- Russian-Linked Crypto Network Funnels $8 Billion Through Tether’s USDT, Escalating Global Sanctions Crisis
- Russian-linked crypto wallets channel $8B to skirt sanctions using Tether’s USDT
- Sanctioned Russian crypto exchange suspends services as Tether blocks wallets
- How a Russian National Allegedly Used Tether to Launder $530M in Crypto
- US Treasury official targets Tether USDT stablecoin in Russian sanction evasion