The DOJ has filed criminal charges in Brooklyn federal court against New York-based Russian crypto startup founder Iurii Gugnin. He was accused of laundering over $500m in payments made on behalf of foreign customers linked to sanctioned Russian financial institutions such as Sberbank, VTB, Sovcombank, and Tinkoff, and distributors with ties to Russian industries.
According to the DOJ, between 2023 and January 2025, those sanctioned entities allegedly used Gugnin’s crypto-based payments company Evita to facilitate the purchase of various items, including sensitive American electronics subject to export controls.
Gugnin reportedly converted cryptocurrencies into US dollars and then carried out transactions on behalf of his clients, obscuring the audit trail and enabling them to bypass export restrictions and evade sanctions. In doing so, he also defrauded banks and crypto exchanges through which he made the conversions, the DOJ stated.
Evita processed nearly $2 billion transactions overall, including $520m within the United States and $320m using the USD-pegged stablecoin tether (USDT), whose price is pegged to the US dollar through a burn-and-mint algorithm.
International money transfer
Gugnin claimed in a 2023 interview that Evita’s business model involved charging international money transfer fees that were just a fraction of what major US banks charged, in part because of the large costs passed onto customers by banks’ anti-money-laundering (AML) programs.
Gugnin also stated that Evita focused on small-to-medium sized businesses and foreign furniture and luxury car acquisitions, and maintained legal accounts at crypto exchanges like Kraken to facilitate stablecoin transactions.
But according to prosecutors, Gugnin’s plan from the start was to move to America to facilitate illicit transactions, while maintaining connections with members of Russian and Iranian intelligence groups. He had been in the country on an O-1 visa, which is granted for extraordinary ability, since 2022 – only a few months after Russia’s invasion of Ukraine.
“…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 US financial institutions,” said US Attorney Joseph Nocella Jr for the Eastern District of New York.
Violations
Gugnin was charged with:
- wire and bank fraud;
- conspiracy to defraud the United States;
- violation of the International Emergency Economic Powers Act (IEEPA);
- operating an unlicensed money transmitting business;
- failing to implement an effective anti-money laundering compliance program;
- failing to file suspicious activity reports; and
- money laundering.
Stablecoin payments go mainstream
In the United States, the bipartisan GENIUS Act has been introduced to regulate certain stablecoins for use in payments.
The legislation will provide 100% federal backing to approved stablecoins used for payments with Treasuries and other liquid assets to prevent its de-pegging from the dollar. But registration carries with it a host of requirements, such as notifying customers that stablecoins are not fiat currency and do not have FDIC protection.
But some Democrats noted a lack of requirements for stablecoin issuers to monitor potentially illegal transactions like those allegedly committed by Gugnin.
“This case is a flashing red light: without basic national security safeguards, our adversaries will use stablecoins to launder money, evade sanctions, and use shady crypto exchanges to hide their illegal activity,” Senator Elizabeth Warren (D-Mass) said in a statement.
Banks have been eagerly eying the possibility of issuing their stablecoins, with Bank of America CEO Brian Moynihan stating that his company will issue its own if permitted.
Like other forms of cryptocurrency, unregulated stablecoins have been highly popular in scams and money laundering due to the ability to quickly move large sums of money untraceably. It is estimated that unregulated stablecoins currently represent around 1% of the volume of total dollars transactions.
