OFAC takes action against two Russian citizens suspected of crypto crimes

Source: Chainalysis; Compiled by: Deng Tong, Golden Finance

On March 20, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) filed a lawsuit against Russian nationals Ilya Andreevich Gambashidze and Nikolai Aleksandrovich Tupikin and their The respective companies imposed sanctions because they assist the Russian government in conducting foreign malign activities, including deceiving voters around the world to undermine trust in their governments. OFAC included two USDT addresses in this designation, and Tether has since frozen Gambashidze’s wallet.

This is not the first time OFAC has taken action against Russian nationals involved in disinformation campaigns involving cryptocurrencies. For example, in April 2021, OFAC designated SouthFront, a disinformation channel associated with the Federal Security Service (FSB). OFAC also took action against the Association for Free Research and International Cooperation (AFRIC), a Yevgeny Prigozhin front company affiliated with the Internet Research Agency (IRA), a prominent Russian group involved in interference in the 2016 presidential election Troll Farm.

In this article, we will explore the operations of Gambashidze and Tupikin, including on-chain activity at the OFAC-designated USDT address today.

Why OFAC sanctioned Gambashidze and Tupikin

Gambashidze is the founder of the Russian Social Design Agency, and Tupikin is the Russian Chief Executive Officer of Company Group Structura, LLC. Both companies hired individuals to spread disinformation about foreign elections and political conflicts, often at the direction of the Russian government.

In a concerted effort, sanctioned individuals attempted to influence foreign elections by impersonating European media and government organizations. By the end of 2022, Gambashidze and Tupikin had created more than 60 websites impersonating these organizations and promoted them on social media with the goal of deceiving campaign voters, according to OFAC.

Gambashidze in particular has a history of promoting disinformation to increase Russia's foreign influence. In 2023, the EU Council included him on a list of sanctioned individuals for targeting voters in Ukraine and several Western European countries. Soon after, he came to the attention of the U.S. State Department for spreading disinformation in Latin America, then turned to propaganda related to the Israel-Hamas war.

Gambashidze’s on-chain activity

OFAC contains two USDT related to Gambashidze (on the TRON network above) Address:

• TEFph7dZoUN5233cGEzF6XFwRpjPF8fQDS

• TMGLqRQ4twjW8wJhVH1mQR7nUThpGHUSN3

The Chainalysis Reactor chart below shows that Gambashidze’s wallet received over $200,000 worth of USDT on the TRON network, a large portion of which came directly from previous Approved Russian exchange Garantex. He then cashed out most of his funds to a single deposit address on a major exchange. These transactions highlight Garantex’s continued involvement in the Russian government’s illegal activities.

Monitoring Russian encryption Related Events

OFAC’s actions today demonstrate its commitment to protecting U.S. citizens from illegal actors, stopping the spread of disinformation, and upholding the integrity of elections around the world. Additionally, we commend Tether for taking swift action to freeze Gambashidze’s wallet to protect the ecosystem from the potential exposure of both addresses. “Tether is not and will not be a vehicle for illegal activity. Our swift action to freeze wallets associated with sanctioned individuals demonstrates our proactive approach to preventing abuse. We remain committed to maintaining the highest level of compliance in the digital asset space and trust standards,” said Tether CEO Paolo Ardoino.

We have marked relevant addresses as associated with sanctioned entities across our product suite.