Russian middlemen use cryptocurrency to avoid US sanctions and purchase spare parts for drones and other high-tech equipment.
How Russia purchases weapons despite the sanctions
Russian smuggler in China Andrei Zverev received a request from Kalashnikov concerning drone electrical parts. The publication notes that the smuggler transferred the order at the end of 2022 to an electronics distributor in Hong Kong. However, the US tried to cut off such deals, and even Chinese banks, wary of sanctions, blocked payments from Russia.
Solution is: Zverev used the tether cryptocurrency to transfer millions of dollars of funds from "Kalashnikov" to his supplier, the publication notes.
At the same time, describing the transaction several months later in messages to a group of Russians, Zverev offered the same service, noting that he could deliver "everything necessary to destroy each other." Payment, he noted, "ideasaidn cryptocurrency, of course."
Tether has become one of the world's standard black-market payment methods. The digital currency claims to be backed one-to-one by the US dollar. But unlike government-issued dollars in the banking system, authorities cannot track their use worldwide, the WSJ writes.
What is known about using Tether
It is said that $120 billion changes hands in Tether daily—often roughly double that of Bitcoin. In 2023, the total number of transactions amounted to more than 10 trillion dollars, almost equal in volume to the payment giant Visa.
For the military machine of Vladimir Putin, Tether has become indispensable. It helps Russian companies circumvent Western sanctions and buy so-called dual-use goods used for drones and other high-tech equipment. Importers working with such goods make transfers in rubles to accounts in Russian banks managed by intermediaries, who in turn convert rubles to tether and pay local currency to their foreign suppliers in places such as China and the Middle East, explains WSJ.
