2 Venezuelans and 5 Russians Accused of Using Cryptocurrency to Evade Sanctions

The group reportedly facilitated the illegal trade of hundreds of millions of barrels of oil as well as military technology.

By Jose Antonio Lanz

Image: Shutterstock

The United States today announced the takedown of a Russian-Venezuelan network that used Tether (USDT) to trade outside the traditional banking structure, thus evading international sanctions.

One of the most discussed geopolitical scenarios for cryptocurrencies is their ability to evade conventional financial restrictions imposed by world powers against their adversaries—but this workaround is becoming increasingly difficult to execute.

A few hours ago, the U.S. Department of Justice announced that it was pressing charges against five Russian and two Venezuelan nationals accused of maintaining a global network of money laundering, smuggling, and trading with sanctioned companies, particularly the Venezuelan state-owned Petróleos de Venezuela, S.A. (PDVSA).

According to a press release, the U.S. Attorney's Office for the Eastern District of New York filed 12 charges against Russian nationals Yury Orekhov, Svetlana Kuzurgasheva, Artem Uss, Timofey Telegin, Sergey Tulyakov, and Venezuelans Juan Fernando Serrano and Juan Carlos Soto.

Per the DOJ, Serrano and Soto facilitated the trade of hundreds of millions of barrels of oil that were subsequently shipped to Russian and Chinese buyers through the intermediation of Orekhov and Uss. Orekhov and Kuzurgasheva, meanwhile, are accused of smuggling military technology to Russia in violation of U.S. interests.

The document explains that Russians used several intermediary companies to facilitate the payments. In addition, they made several million-dollar transfers in cryptocurrencies to avoid sanctions.

According to sources cited by The Block, Orekhov told an accomplice: "No worries, no stress. As soon as we start berthing, we will immediately transfer. USDT works quick like SMS."

The case is under the responsibility of the Office's National Security and Cybercrime Section. Assistant U.S. Attorney Artie McConnell is in charge of the prosecution. The arrests and charges were the results of a joint effort between U.S., German, and Italian law enforcement agencies.

Russia, Venezuela, and Ukraine: Cryptocurrencies Enter the Scene

PDVSA was sanctioned during the Donald Trump administration along with the country's official cryptocurrency, the Petro. As a result of the sanctions, the United States effectively eliminated the possibility for Venezuela to establish normal commercial relations with any country in the world.

Under the sanctions, the United States effectively prevented Venezuela from establishing normal commercial relations with most countries in the world since whoever trades with the oil company is exposed to not being able to maintain commercial relations with the North American power—as well as facing other physical and monetary consequences.

This political move generated losses to Venezuela on the order of $240 billion, according to sources cited by the Venezuelan media outlet Últimas Noticias.

Meanwhile, sanctions against Russia intensified after the invasion of Ukraine. The use of cryptocurrencies has played an important role in this war, as Ukraine has been able to receive close to $100 million, allowing it to purchase military equipment, including vests, heat visors, food for troops, communication devices, and medicines.

Similarly, Russian militias have received cryptocurrency donations to support their cause —albeit in lesser amounts— and lawmakers around the world have joined forces to prevent Russia from being able to use cryptocurrencies to its advantage in the same way Ukraine has.