Russian Authorities Dismantle $2.2M Cross-Border Cryptocurrency Exchange Suspected of Operating Under Cover of Travel Agency

Police in Moscow claim to have shut down an illicit crypto exchange allegedly operating under the guise of a travel agency.

According to authorities, the operators facilitated cross-border cryptocurrency transfers, handling transactions totalling $2.2 million for Russian clients.

Commission-Based Crypto Transfers

The Russian Interior Ministry, in a Telegram post, disclosed that the exchange allegedly charged clients a 1% commission fee for transferring funds abroad.

A recent raid revealed the exchange was involved in "illegal banking activities," processing payments for cash-paying customers who wished to transfer money to overseas crypto wallets.

Video footage from the raid shows agents discovering stacks of US dollars, receipts, and computer equipment, as well as interrogating a staff member who stated:

“We didn’t do anything. We conducted crypto exchange transactions. And nothing else.”

Source: Ministry of Internal Affairs, Russia

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Ongoing Investigation and Seizures

The investigation is ongoing, with police seeking to identify further suspects. In addition to the initial raid, officers also searched other offices and private apartments, confiscating various currencies, communication devices, and documents.

The alleged ringleader has been charged, while the authorities continue their search for additional accomplices.

Background on Crypto Activity in Moscow

This operation follows reports from March 2023 that suggested several Moscow-based crypto exchanges were helping Russians send Tether (USDT) to the UK.

Additionally, in May 2023, the Russian Central Bank reported a significant increase in crypto transactions on both exchanges and peer-to-peer platforms, despite crypto exchanges lacking legal status in Russia.

Many unofficial exchanges have been accused of using crypto as a means of circumventing regulations on cross-border fiat currency transfers, under the pretence of offering investment services.