Crypto Founder Arrested for $530 Million Money Laundering Scheme

A crypto founder has been arrested in New York for allegedly using his crypto firm, Evita Pay, to funnel around $530 million into the US from sanctioned Russian banks to help Russians access highly sensitive American technology. Iurii Gugnin was hit with a 22-count indictment and will face charges related to wire and bank fraud, money laundering and operating an unlicensed money transmitting business, among others, the US Department of Justice said on Monday. If convicted, Gugnin could spend life behind bars. It’s the latest case involving the use of crypto to attempt to bypass sanctions and launder funds.

The DOJ alleges that Gugnin operated a sprawling money laundering scheme from June 2023 to January 2025, processing stablecoin Tether (USDT) transactions on behalf of Russian clients tied to blacklisted banks like Sberbank, VTB, Sovcombank and Tinkoff. According to John A. Eisenberg, assistant attorney general for national security, Gugnin turned his crypto company into a “covert pipeline for dirty money,” moving around $530 million through the US financial system to aid sanctioned Russian banks and help Russian end-users acquire sensitive American technologies. “The Department of Justice will not hesitate to bring to justice those who imperil our national security by enabling our foreign adversaries to sidestep sanctions and export controls.”

Gugnin allegedly lied to US banks about Evita’s Russian ties, manipulated invoices to hide client identities and ignored Anti-Money Laundering rules despite registering Evita Pay as a money transmitting business in Florida using false statements, the DOJ said. Gugnin also allegedly conducted web searches like: “Am I being investigated” and “signs you may be under criminal investigation,” according to the DOJ, which claims those searches signaled an awareness that he was breaking the law. Gugnin faces up to 30 years in prison for each count of bank fraud, a maximum of 20 years for each wire fraud count, and up to 10 years for failing to implement an effective Anti-Money Laundering program and failure to file suspicious activity reports. The crypto founder could receive up to five years in prison for conspiracy to defraud the US.

This case underscores the growing concern over the use of cryptocurrency in illegal activities. Cryptocurrencies, while offering benefits such as decentralization and anonymity, also present significant challenges for law enforcement agencies. The ability to track and seize cryptocurrency assets is a critical component of efforts to combat money laundering and other financial crimes. The DOJ's action against Gugnin is part of a broader effort to address the challenges posed by cryptocurrency. As the use of cryptocurrency continues to grow, so too does the need for robust regulatory frameworks and enforcement mechanisms. The DOJ's action sends a clear message to those involved in money laundering and other financial crimes that their activities will not go unpunished.

The case also highlights the importance of international cooperation in combating financial crime. The North Korean schemes involved in this case demonstrate the global nature of financial crime, which often crosses national borders. Effective enforcement requires coordination and collaboration between law enforcement agencies in different countries. The DOJ's action against the cryptocurrency executive is a significant step in the ongoing battle against financial crime. By targeting the assets of those involved in illicit activities, the DOJ aims to disrupt the financial networks that support criminal enterprises. The seizure of $7.74 million in cryptocurrency sends a clear message to those involved in money laundering and other financial crimes that their activities will not go unpunished.

The case also raises important questions about the role of technology in financial crime. The use of cryptocurrency in money laundering and other illegal activities highlights the need for continued innovation in financial technology. As new technologies emerge, so too must the tools and techniques used to combat financial crime. In conclusion, the DOJ's action against the cryptocurrency executive is a significant development in the ongoing battle against financial crime. By targeting the assets of those involved in illicit activities, the DOJ aims to disrupt the financial networks that support criminal enterprises. The case also highlights the importance of international cooperation and the need for robust regulatory frameworks and enforcement mechanisms. As the use of cryptocurrency continues to grow, so too must the efforts to address the challenges it presents.