UK National Crime Agency disrupts multi billion dollar laundering network

UK National Crime Agency disrupts multi billion dollar laundering network

The United Kingdom’s National Crime Agency (NCA) disrupted a multi-billion dollar money laundering network, which provided services to a wide range of illicit actors, including Russian and international elites, cybercriminals, and drug gangs.

The NCA’s efforts, named “Operation Destabilise,” identified two Russian-speaking networks (Smart and TGR) leading these operations, which have thus far led to 84 arrests of individuals linked to these groups and the seizure of more than 20 million Euros in cash and cryptocurrency.

Today’s disruption was an internationally-coordinated effort, involving organizations including the U.K. Metropolitan Police Service, France’s Direction Centrale de la Police Judiciaire, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Drug Enforcement Agency (DEA), and the Federal Bureau of Investigation (FBI), among others. This collaboration led to the arrest of another individual linked to Smart and TGR who facilitated global money laundering.

Additionally, OFAC sanctioned four entities and five individuals associated with TGR; OFAC included cryptocurrency addresses for two of the individuals:

George Rossi (AKA Maksakov, Yury, Georgy Rossi, or Heorhii Rossi): A Ukrainian national who founded TGR Partners, is the director of TGR Corporate Concierge LTD, and likely controls the TGR Group.
Elena Chirkinyan (AKA Yelena Norayrovna Chirkinyan or “Elle”): A Russian national who is Rossi’s direct subordinate, a partner at TGR Partners, the CEO of TGR Corporate Concierge LTD, and the manager of TGR DWC-LLC.
Andrejs Bradens (AKA Andrejs Carenoks): A Latvian national associated with several TGR networks.
Nikita Vladimirovich Krasnov (AKA “ACESCOM”): A Russian national who laundered cash and cryptocurrency on behalf of elite clients.
Khadzhi Murat Dalgatovich Magomedov (AKA Magomedov or Murat): A Russian national who laundered cash and cryptocurrency on behalf of elite clients.
TGR Partners: A Moscow-based organization founded by Rossi that provided services to a wide range of illicit actors, such as cryptocurrency trading, foreign exchange payments, and concierge services.
TGR Corporate Concierge LTD: A U.K.-based network controlled by Bradens. Chirkinyan is its CEO.
TGR DWC-LLC: A UAE-based network operated by Chirkinyan that provided services to help elites obscure the source of ill-gotten funds.
Siam Expert Trading Company Limited: A Thailand-based network associated with Bradens.
Pullman Global Solutions LLC (Pullman Global): A Wyoming-based organization owned by Bradens.
The cryptocurrency addresses in OFAC’s designation include a deposit address for Chirkinyan at a mainstream exchange (TDdbRFoBTEmE3qiR69Y6rKRSG1hoF65QaE) that has received over $146,000, and a high-volume wallet controlled by Magomedov (0x1999ef52700c34de7ec2b68a28aafb37db0c5ade) that has processed more than $200 million. The wallets have received high-value transfers, reflecting bulk cash transfers and transactions conducted on behalf of TGR clients.

Operation Destabilise determined that Smart, TGR, and their related networks often transferred money across borders by swapping cash and cryptocurrency. In some instances, Smart and TGR would receive funds in crypto from a client, facilitate a transfer in cash, and take a percentage of the amount. They would also follow a similar process in reverse, exchanging cash for crypto. It was unlikely that these clients would overlap, given that Smart and TGR were operating across 30 countries, and used a network of international controllers and couriers to actually perform the handovers.

The NCA also detailed that Smart and TGR provided illicit financial services on the streets in the U.K. to traditional crime groups by exchanging their cash proceeds for crypto, which they then used to further their criminal activities by paying for drugs to international cartels. Unfortunately, these networks enable serious crime in the U.K. and other countries, which threatens the country’s financial integrity and, in many cases, results in physical violence.

UAE Public Prosecution discusses money laundering crimes using virtual assets

UAE Public Prosecution discusses money laundering crimes using virtual assets

The UAE Public Prosecution is launching a forum entitled  “Financial Crimes Foresight Forum” on 11th October 2023, to discuss money laundering crimes using Virtual Assets. The event will be organized in anticipation of the upcoming International Summit on Metaverse Governance and Emerging Technology, scheduled to commence early next year in 2024.

The forum aims to study and analyze trends in financial crimes and explore proactive preventive measures based on modern and future global trends. It also seeks to explore the future of financial crimes in all its forms and delve into in-depth research to present them as topics for the upcoming International Summit on Metaverse Governance and Emerging Technology.

The forum presents an opportunity for exchanging experiences and enhancing awareness and commitment to combating various forms of financial crimes, especially those based on virtual assets. Experts will discuss the evolution of financial crimes related to virtual assets to shed light on achieving a balance between technological advancements and financial security guarantees. Moreover, it aims to develop scenarios for future information security challenges in the financial and banking sectors and the cyber risks they may face.

The forum will host a select group of speakers from the UAE Public Prosecution, the Securities and Commodities Authority, the Cyber Security Council, the Executive Office for Anti-Money Laundering and Counter-Terrorism Financing, the UAE Financial Information Unit, the Dubai Police General Headquarters, the Economic Security Center of Dubai, the Dubai Public Prosecution, and the Virtual Asset Regulatory Authority of Dubai.

MENA FATF adopts Abu Dhabi’s five recommendations on virtual assets

MENA FATF adopts Abu Dhabi’s five recommendations on virtual assets

During the recent MENA FATF (Financial Action Task Force) regional body’s workshop attendees adopted several recommendation proposes by Abu Dhabi including those pertaining to virtual assets, in the fight against money laundering, and terrorism.

The Abu Dhabi recommendations consist of 24 best practice commitments made by MENAFATF member states for enhancing regional efforts to counter money laundering and financing of terrorism.

The recommendations were agreed at the closing of the MENAFATF Typologies and Capacity Building Workshop held between 6-8 March 2023 under the patronage of H.H. Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs, and Chairman of the Higher Committee Overseeing the National Strategy on Anti-Money Laundering and Countering the Financing of Terrorism, and hosted by the UAE Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AML/CTF) in Abu Dhabi.

Of the 24 recommendation five pertained to virtual assets. The first discussed enhancing MENAFATF countries’ understanding of the requirements of Recommendation 15, including the sectorial risk assessment of virtual assets, given the rapid development in this field.

The second recommendation  urged countries to build capacities in the field of virtual assets with the competent authorities, especially in the field of supervision, control, investigations and management of seized and confiscated assets and the extent of their use in evading sanctions.

While the third recommendation proposed continuing to adopt new technologies to mitigate the risks of virtual assets in partnership with the private sector.

As for the fourth and fifth recommendations, one proposed enhancing national cooperation in following up on issues related to virtual assets between the competent authorities and urged the use of best practices such as specialized task forces (working groups), while the other proposed raising awareness among member countries about the risks of cybercrime, particularly ransom ware and related payment methods, especially concerning VAs.

Suliman Al Jabrin, Executive Secretary of MENAFATF, stated that regional alignment on best practices has created of a set of shared standards that strengthens the national AML/CFT systems of member states. He added, “I am delighted that the 24 recommendations made by MENAFATF members in Abu Dhabi cover a comprehensive range of the most pressing issues facing us today. It is right that the list includes Virtual Assets (VA), ML typologies, Public-Private Partnerships, regional assessments, and multiple means of expanding cooperation. The MENA region plays an important role in the global economy, and the Abu Dhabi recommendations send a strong signal to our international partners that there is no place for financial crime in our part of the world.”

Jordan on FATF grey list because of virtual assets risks

Jordan on FATF grey list because of virtual assets risks

On February 24th 2023 FAFT released its latest grey and black list. For those who are on the grey list it means that these jurisdictions are under increased monitoring and are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.

As per the recent announcement by FATF, “When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.”

Of the Arab countries on the grey list, was Jordan. It was on the list because of risks in virtual assets. As per FATF one of the reasons for it being on the list was because it needed to address strategic deficiencies including “completing and disseminating the money laundering and terrorist financing risk assessments of legal persons and virtual assets.”

It was interesting to see the term virtual assets in relation to Jordan because Jordan has not been on the list in terms of countries with high crypto ownership or transactions. Other countries such as Egypt, Morocco, and Lebanon are much more active in crypto. yet FATF chose to include the risks of virtual assets as one of the reasons it was one the grey list. 

According to Triple A crypto ownership report, the percentage of Jordanians who own crypto is just 1.5 percent equivalent to 170,000 people as of January 2023 an increase from 1.25 percent in 2022.

Concurrently, the IMF after its technical report on Jordan’s Central Bank feasibility for the launch of retail CBDC after a three month mission, recently released its report. IMF gave Jordan’s existing payment market a positive review calling it well integrated.

Nonetheless, The IMF stated that an rCBDC would enhance financial inclusion by providing services to residents without smartphones and could also improve the domestic payment system by making its infrastructure available to PSPs and lowering the cost of cross-border transfers.

The IMF however warned to avoid disintermediation in the Jordanian financial system, as it could contribute to instability in times of stress. The IMF found that an rCBDC could increase cybersecurity risks as an attractive target. “Sound legal underpinnings for an rCBDC should also be created,” the report said. 

In its report the IMF noted, “RCBDC may offer some benefits, but it does not necessarily address pain points. On the other hand, a cross-border rCBDC could add value, particularly if the authorities coordinate with other countries in the region.”

Jordan’s Central Bank had announced in February 2022 that it was researching a CBDC. Cointelegraph article noted that a central bank proposal to introduce crypto trading met with resistance in the parliament.

Whatever the case, Jordan being on FATF grey list because of virtual assets risks is another reminder of the need to regulate crypto assets.