The U.S. and U.K. are investigating $20 billion worth of cryptocurrency transactions that went through a Russia-based virtual exchange, part of an allied effort to tackle Moscow's evasion of sanctions over Putin's war in Ukraine, Bloomberg reported, citing people. familiar with the matter.

The payments under investigation went through the Moscow-based Garantex crypto exchange using the dollar-pegged cryptocurrency Tether, the agency's sources said. The transfers took place after Garantex was sanctioned by the US and the UK on suspicion of enabling financial crimes and illegal transactions in Russia, they said.

The investigation shows the West's continued attempts to decisively cut off the flow of funds to Russia following a series of sanctions imposed over Moscow's military invasion of Ukraine. However, Russia managed to stave off the economic collapse many expected by building a vast network of backdoors and workarounds, including offshore oil transfers, technology exchanges through third countries and encrypted digital currency transactions.

The US economy grew by 3.4% in the last quarter of 2023.

President Joe Biden's administration has been trying to clamp down on crypto exchanges like Garantex since the early days of Russia's war in Ukraine. However, the $20 billion transactions would represent one of the largest violations of sanctions since they were introduced, the sources cited by Bloomberg said.

They also cautioned that investigations are ongoing and that it is too early to predict their conclusions given the complexity and non-transparency of cryptocurrency transactions. The agency's sources said there was no immediate suggestion of wrongdoing by Tether Holdings, which is registered in the British Virgin Islands, a British overseas territory.

Tether is the so-called a "stable coin" that aims to maintain a one-to-one value against the US dollar. It is the most traded cryptocurrency in the "stable coin" world, with Tether in circulation valued at over $100 billion.

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