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  • US Treasury Cracks Down: Sanctions Crypto Money Launderer Tied To Russian Elite

    US Treasury Cracks Down: Sanctions Crypto Money Launderer Tied To Russian Elite

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    In a significant move to combat sanctions evasion and illicit financial activities, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Ekaterina Zhdanova, a Russian national allegedly involved in laundering and transferring funds using crypto on behalf of Russian elites. 

    According to the announcement, the action aligns with the G7’s commitment to closing loopholes that allow Russian state actors, oligarchs, and proxies to exploit virtual currency to circumvent international sanctions.

    Crypto Money Laundering Exposed

    Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson emphasized the alleged role played by key facilitators like Zhdanova in aiding Russian elites, ransomware groups, and other illicit actors in evading US and international sanctions through the abuse of cryptocurrencies. 

    Nelson stated that the Treasury remains steadfast in its efforts to safeguard the global financial system against such exploitation and other risks within the crypto ecosystem.

    Allegedly, Zhdanova’s involvement in obfuscating the source of wealth for a Russian client, enabling the transfer of over $2.3 million into Western Europe via fraudulent investment accounts and real estate purchases, drew OFAC’s attention. 

    Zhdanova’s services provided sanctioned Russian individuals access to Western financial markets that would otherwise be restricted due to US and international prohibitions. 

    The US Treasury Department alleges that such illicit financial activities enable the evasion of multilateral sanctions and undermine efforts to hold Russia accountable for its unprovoked war and aggression.

    Utilizing cryptocurrencies as a facilitator of large cross-border transactions, Zhdanova relied on entities lacking Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) controls, including the OFAC-designated Russian cryptocurrency exchange, Garantex Europe OU. 

    Zhdanova employed various methods to transfer funds internationally, including cash transactions and leveraging connections with other money laundering associates and organizations. 

    Additionally, she utilized traditional businesses, such as a luxury watch company with global offices, to maintain access to the international financial system.

    Furthermore, it is alleged that Zhdanova conducted crypto exchange transfers on behalf of oligarchs who relocated internationally, facilitating the movement of over $100 million to the United Arab Emirates. 

    Unveiling The Scheme

    Zhdanova also provided a tax residency service in the UAE to Russian clients, potentially participating in identity obfuscation. This service offered clients a UAE tax residency, identification card, and bank account, with payments made in cash or virtual currency, subsequently transferred to foreign bank accounts at the client’s discretion.

    Notably, Zhdanova’s services extended to individuals associated with the notorious Russian Ryuk ransomware group. Zhdanova allegedly laundered approximately $2.3 million in suspected victim payments for a Ryuk ransomware affiliate, which has targeted numerous victims worldwide, including the United States, particularly in the healthcare sector.

    As a consequence of this action, all US persons must report any property or interests in property belonging to Zhdanova or any entities directly or indirectly owned by her. Transactions involving such property are generally prohibited unless authorized by OFAC.

    The total crypto market cap consolidation above the $1.20 trillion mark. Source: TOTAL on TradingView.com

    Featured image from Shutterstock, chart from TradingView.com 

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    Ronaldo Marquez

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  • G-Secs perk up, shrugging off higher June inflation reading

    G-Secs perk up, shrugging off higher June inflation reading

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    The Government Securities (G-Secs) market perked up on Thursday, shrugging off the higher domestic retail inflation print for June even as it tracked the decline in US Treasury yields.

    In the domestic bond market, yield of the 10-year benchmark paper (7.26 per cent 2033 GS) thawed about 4 basis points to close at 7.07 per cent (previous close: 7.11 per cent), with its price rising about 30 paise to close at Rs 101.2775 (Rs 100.9825).

    Bond yields and prices are inversely co-related and move in opposite directions.

    “US inflation reading for June at 3 per cent seems to be moderating towards the Fed’s target rate of 2 per cent.…So, US 10-year Treasury has rallied. Its yield is back to 3.86 per cent level from 4.06 per cent level earlier. Our market mirrored the rally in US Treasuries.

    “Our inflation is not too high. We are still in the comfort zone of 4-6 per cent. At this point of time, our debt market is taking cues from the US market. That is why it rallied along with the US market,” Ajay Manglunia, MD & Head, Investment Grade Group, JM Financial.

    Retail inflation up

    India’s retail inflation print for June came in higher at 4.81 per cent against 4.31 per cent in May 2023 on spike in vegetable prices

    Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort Fincap LLP, emphasised that the trigger for the rebound in G-Secs was the rally in US Treasuries, which came on the back of a thaw in US retail inflation.

    “The market was just looking for a positive trigger. Now, that trigger has come in the form of softer retail inflation in the US, which in turn is giving hopes the Fed may not hike rates,” he said.

    Venkatakrishnan expects the 10-year G-Sec to trade in the 7.05 per cent to 7.15 per cent range over the next one week.

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  • SBI mops up $750 million via 5-year bond issuance

    SBI mops up $750 million via 5-year bond issuance

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    India’s largest bank State Bank of India  said it has raised $750 million via a 5-year bond issuance at a coupon rate of 4.875 per cent.

    The bonds are benchmarked against 5-year US treasury and priced at a spread of 145 basis points (bps) over the benchmark, the bank said in a statement. The bank raised the resources via its London branch. 

    The bonds were issued under SBI’s MTN (medium term note) Programme and will be listed on Singapore SGX and the India INX, Gift City. The Notes are expected to carry a final rating of BBB- and BBB- from Standard & Poor’s and Fitch respectively, per the statement.

    The issuance received good response and saw strong interest from investors across geographies with a final order book in excess of USD 2.9 billion across 181 accounts.

    “On the back of strong demand, the order booked peaked at USD 5.4 billion, making room for the guidance to be revised from T+185 area to T+145,  which is the largest spread compression amongst all USD Indian bond issuances during current year,” the bank said.

    Dinesh Khara, Chairman, SBI observed that the successful issue demonstrates global investors’ confidence in the Indian banking sector in general, and in SBI in particular, and it also attests to SBI’s unparalleled access to global capital markets.

    Citigroup, Emirates NBD Capital, HSBC, J.P. Morgan, MUFG and Standard Chartered Bank acted as Joint Global Coordinators and Joint Lead Managers for this offering.

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  • US Treasury removes India from its Currency Monitoring List

    US Treasury removes India from its Currency Monitoring List

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    The US Department of Treasury on Friday removed India along with Italy, Mexico, Thailand and Vietnam from its Currency Monitoring List.

    China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan are the seven economies that are a part of the current monitoring list, the Department of Treasury said in its biannual report to the Congress.

    The countries that have been removed from the list have met only one out of three criteria for two consecutive reports, it said.

    “China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism makes it an outlier among major economies and warrants Treasury’s close monitoring,” said the report.
     

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