Crypto Founder Charged With Laundering Over $500M From Sanctioned Russian Banks

The U.S. Department of Justice on Monday unsealed a 22-count indictment against Lurii Gugnin. The indictment outlined charges related to alleged fraud and money laundering against the 38-year-old Russian citizen living in New York for allegedly using his cryptocurrency company, Evita, to launder over $530 million from sanctioned Russian entities through the U.S. between June 2023 and this past January.

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‘A Money Laundering Operation Under The Guise Of A Cryptocurrency Start-Up’

The DOJ said Gugnin’s scheme primarily involved receiving Tether or USDT from Russian interests and laundering them through cryptocurrency exchanges and U.S. banks. The DOJ alleged he used the fiat derived from the converted cryptocurrency to make payments on behalf of his clients through Manhattan bank accounts.

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Beyond money laundering, the DOJ said Gugnin helped clients purchase sensitive U.S. technology, including parts for a Russian state-owned nuclear technology company.

“As alleged, Gugnin came to the United States and set up a money laundering operation under the guise of a cryptocurrency start-up, which he then used to evade sanctions and export controls and defraud U.S. financial institutions,” U.S. Attorney for the Eastern District of New York Attorney Joseph Nocella Jr. said in a statement.

To successfully carry out his operations, the DOJ said Gugnin misrepresented the sources of his company’s funds to cryptocurrency exchanges and banks. The DOJ alleged that he “repeatedly lied” that Evita did not do business with entities in Russia or sanctioned entities and modified documents to cover his tracks. The firm also used these fraudulent methods to obtain a money transmitter license from the Financial Crimes Enforcement Network in Florida, the DOJ said.

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The DOJ cites Gugnin’s alleged internet search history as awareness of wrongdoing. His history allegedly includes phrases like “how to know if there is an investigation against you” and “Iurii Gugnin criminal records.”

If found guilty, Gugnin faces possible life imprisonment. Each count of bank fraud carries a maximum sentence of 30 years in prison while each count of wire fraud carries a maximum prison sentence of 20 years.

Russian Turning To Cryptocurrency

The Gugnin case is another instance highlighting Russia’s increasing dependence on cryptocurrencies to sidestep international sanctions imposed in response to its invasion of Ukraine.

The U.S. Secret Service in March seized multiple internet domains associated with Russian cryptocurrency exchange Garantex, alleging that the platform engaged in money laundering operations for sanctioned Russian banks and criminal organizations.

Meanwhile, Russia is not the only sanctioned jurisdiction trying its hands on cryptocurrencies. Chainalysis reported in February that sanctioned jurisdictions and entities received $15.8 billion in cryptocurrency in 2024, accounting for 39% of the volume of illicit cryptocurrency transactions.

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