Despite international sanctions against Russia and the country’s potential cut-off from the SWIFT international payments network, money continues to flow between Russia and the West. Brokers now offer over-the-counter (OTC) services to convert Russian rubles into foreign currency, in cash, through stablecoin (USDT) transactions.
According to the Russian branch of Transparency International, a global anti-corruption NGO, at least eight OTC brokers in Moscow are offering to sell tens of thousands of dollars in stablecoins for cash. Funds can then be exchanged for pounds sterling in the U.K. – all without know-your-customer (KYC) paperwork.
The U.K. has long been a preferred destination for Russian money stashed abroad, including Russian firms raising capital investment and Russian oligarchs, such as Roman Abramovich, parking their savings in elaborate houses and soccer clubs. However, moving money between Russia and the rest of the world has become more difficult since the country’s invasion of Ukraine in 2022.
In response, the U.S. and European countries moved to isolate Russia from the global financial system, including cutting most Russian banks off from the SWIFT system. While a handful of Russian banks can still do currency transfers, they often face delays or additional checks from foreign banks. Additionally, the European Union banned Russian citizens from using European crypto services.
Despite these measures, brokers have found ways to move tens of thousands of dollars in cash across the Russian border without declaring them at customs control. One can purchase the largest U.S. dollar-pegged stablecoin by market cap, tether (USDT), for cash in Moscow and then sell it for cash in London. That way, clients can avoid registration, identity verification, licenses, and guarantees.
Transparency International found eight brokers offering to buy USDT for pounds sterling, including Suex, an OTC that has been sanctioned but continues to operate.
As a prospective client, Transparency researchers texted the Suex official account on Telegram and received a response that it could sell 15,000 USDT for cash in London for a 1.5% fee.
The seller must send USDT first and receive cash from an anonymous courier within five hours.
Other brokers offer similar terms, with commissions between 1% and 3% and same-day delivery in an agreed location in London.
However, these transactions carry risks for users, as they need to trust anonymous counterparties behind a Telegram nickname. In addition, the seller sends crypto first and receives cash hours later, creating uncertainty.
Transparency’s investigation shows that political sanctions may be a powerful tool to limit money flows to a punished jurisdiction. Still, they usually fail to stop the flow of unidentified funds completely.
While brokers continue to offer cash-for-stablecoin transactions, the question remains whether regulators and law enforcement will take action to stop these activities.
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