Opposition Press Links Russian Lawmaker With Homegrown OTC Crypto

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A Russian lawmaker who was one of the authors of the bill to legalize cryptocurrency mining in the country has been linked to a local OTC exchange known as Bankoff.

Russian opposition activist Mikhail Khodorkovsky linked Bankoff OTC to lawmaker Andrei Lugovoi in an article by the London-based investigative project Dossier Center on December 19.

The 6,000-word article was accompanied by a video titled Crypto-Kremlin: How Authorities Are Laundering Bitcoin, which aired on the Khodorkovksys Live YouTube channel.

According to Dossier, Bankoff is the most active peer-to-peer trader using Russian rubles on leading global crypto exchange Binance. As previously reported, Binance has continued to serve unsanctioned Russians despite the European Union banning all crypto transactions for Russia in October. The Bankoff OTC platform only accepts cash from customers and has almost no anti-money laundering or Know Your Customer checks.

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— – (@dossier_center) December 19, 2022

The trader’s office would be located on the 65th floor of a building in Moscow’s skyscraper district. The premises are owned by the Bratsk Electricity Network, a company that distributes electricity in the city of Bratsk in central-eastern Russia, which is a center for cryptocurrency mining.

According to Dossier, Bankoff could earn up to $20,000 daily with up to 4% commissions on users’ crypto trades. Lugovois’ wife, Ksenia Lugovaya, has also reportedly owned a share of the Bratsk electricity network since 2018. A statement filed by her husband and allegedly shown in the Dossier video says Lugovaya had an income of 29.6 million rubles. , or just over $400,000, in 2021. with no other sources of income than the Bratsk electricity company.

Dossier’s article and video also describe how a Dossier representative could have converted 100,000 rubles ($1,400) into Tether (USDT) using sanctioned Russian crypto exchange Garantex. The representative was reportedly able to send USDT from Garantex to Binance and then successfully transfer it to an account at UK-based fintech Wise, allowing the money to be distributed despite US sanctions.

Such a scheme not only allows Russian government officials to avoid sanctions, but also generates money for them, the video speaker explained, stating:

That doesn’t stop Russian officials and members of the security forces from using cryptocurrency to not only smuggle millions out of the country, but also to make money doing it. People who are the focus of close attention from law enforcement around the world have long been linked to this.

While seemingly profiting from crypto themselves, Russian lawmakers have actively opposed the idea of ​​crypto investing by ordinary people. The Russian government has not legalized any local cryptocurrency exchanges, while the central bank has taken a tough stance against crypto investments.

Related: Putin calls for a blockchain-based international payment system

Besides supporting one of the largest OTC crypto platforms in Russia, Lugovoi is known for developing local cryptocurrency laws. He is one of the authors of the cryptocurrency mining bill presented to the lower house of the Russian parliament on November 17. Lugovoi began his political career after being implicated in the poisoning of former Russian security service agent Alexander Litvinenko in the UK in 2006.

Additional reporting by Helen Partz.

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