Cryptocurrency Exchanges in Lithuania and Estonia: Investigation into Sanctions Evasion
Date: 2023-10-05 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, IN WORLD
Cryptocurrency Exchanges in Lithuania and Estonia at the Center of Sanctions Evasion Scandal
Cryptocurrency exchanges in Lithuania and Estonia have come under scrutiny for their alleged involvement in helping Russians circumvent sanctions. An investigation conducted by several European publications, including Delfi (Estonia), Siena.lt (Lithuania), Frontstory.pl (Poland), Paper Trail Media, Der Spiegel, and ZDF (Germany), as well as Der Standard (Austria), revealed multiple violations, including fraudulent schemes, money laundering, and sanctions evasion.
Of particular concern is the Estonian exchange Coinsbit, which provides users with the ability to convert Russian rubles into Bitcoin. Although co-founded by businessman Nikolay Udiansky, the current leadership of the company remains unknown. This exchange has drawn attention due to questionable operations involving rubles, which could potentially be used to bypass sanctions.
Another exchange mentioned is MEXC, an international cryptocurrency platform with a daily trading revenue of approximately 500 million euros. MEXC operates a subsidiary in Estonia and holds a license for virtual assets. The exchange offers ruble payments through a peer-to-peer (P2P) method, allowing clients to transfer money to private accounts in Russian banks and receive cryptocurrency into their wallets. This facilitates the evasion of sanctions, as funds can be easily transferred to exchanges that support the conversion into US dollars and euros through European and US banking systems.
Additionally, journalists highlighted MoneySwap OÜ, a company managing the Mercuryo platform, which established a subsidiary called MoneyAmber UAB in Lithuania. Mercuryo's shares are owned by the Cypriot company MRCR Holdings, with one of the shareholders being Akshin Jangirov, the brother of Jangir Jangirov, a former vice president and head of the "Risks" division at Sberbank.
Licensing of Cryptocurrency Companies in Estonia
The investigation also raises questions about the licensing system for cryptocurrency companies in Estonia. According to the findings, over 1,600 licensed cryptocurrency companies operated in the country, and many of them faced allegations of violating the law. Surprisingly, among the owners and executives of such companies were ordinary welders, taxi drivers, and municipal workers, raising concerns about the quality of control and regulation in this industry.
These incidents underscore the importance of tightening regulatory requirements and oversight of cryptocurrency companies to prevent their use in illegal operations and sanctions evasion. It also sparks discussions on the necessity of international cooperation in combating financial crime in the cryptocurrency sphere.
