Unmasked Transfer: Alleged Persistence of Russian Finances in Germany - Financial Institution Issues Caution on Potential Risk
In a move to circumvent international sanctions, Russian Sberbank customers are reportedly using a multi-step system involving intermediaries, cryptocurrency conversions, and partner providers. This method allows them to transfer millions of dollars abroad, despite the bank's exclusion from the SWIFT system and the formal impossibility of sending money directly to EU countries.
The process begins with Sberbank sending rubles to payment companies in countries such as Tajikistan, Uzbekistan, or Kazakhstan. The money is then converted into cryptocurrency, often stablecoins like Tether (USDT). The cryptocurrency is sent to partner providers who facilitate the transfer to the final recipient abroad. Recipients often receive money through personal transfers or payments for services via “drop” cards—cards linked to third parties who provide their data for these transactions.
This method is also reportedly used in online casinos, illegal bookmakers, and crypto exchanges to obfuscate the money trail and evade detection. Some Russian clients are also using European fintech platforms like Revolut and Germany’s N26, despite these platforms’ terms of service forbidding such transactions, potentially risking account freezing or closure.
The relative regulatory laxity and lower oversight in certain Central Asian countries, combined with the flexibility of digital assets, are enabling Russia to maintain financial flows despite stringent sanctions. This system exemplifies how Russia has adapted its sanctions evasion toolkit over time, exploiting weaker regulatory environments and cryptocurrency channels to circumvent restrictions.
However, the legality of these transactions and the regulatory measures applied to them are questionable. All financial institutions face a significant risk of being targeted by sanctions evasion attempts, despite stringent compliance measures. N26, a regulated European financial institution, takes its responsibility seriously and has robust processes to comply with sanctions regulations. They continuously monitor potential patterns that could be misused to circumvent existing sanctions controls.
Meanwhile, the transfers are made through non-sanctioned Western banks like Revolut (UK) and N26 (Germany). As a result, Russian and German companies are switching to banks in China, Kazakhstan, and Turkey due to EU sanctions. The Russian Sberbank, due to its exclusion from the SWIFT system, can only conduct transactions to a limited extent. Transfers to Germany are possible despite the absence of EU countries on the list of countries accessible via Sberbank's app, due to the bank's exclusion from the SWIFT system.
As the sanctions saga continues, both Russia and the international community are adapting their strategies, with Russia leveraging cryptocurrency and weaker regulatory environments to maintain financial flows, and the international community tightening sanctions and scrutinising financial transactions more closely.
- Russian citizens, in an effort to bypass international sanctions, have been utilizing a complex system that involves Sberbank, cryptocurrency exchanges, payment companies in countries like Tajikistan, Uzbekistan, or Kazakhstan, and partner providers for transferring funds abroad.
- This method, employed in online casinos, illegal bookmakers, and crypto exchanges, is used to obscure financial trails and dodge detection, with some Russian clients allegedly using European fintech platforms like Revolut and N26, despite their terms of service prohibiting such transactions.
- The regulatory lenience and reduced oversight in certain Central Asian countries, together with the flexibility of digital assets, are empowering Russia to sustain its financial activities despite intense sanctions, creating a system of adaptability in Russia's sanctions evasion strategies.
