Russia’s largest and sanctioned cryptocurrency exchange, Garantex, has made headlines after announcing the suspension of all its operations following Tether’s decision to freeze over 2.5 billion rubles worth of USDT. The move has sent shockwaves through the Russian crypto market, with users left in limbo as they await further developments.
In a statement released on March 6 on Telegram, Garantex informed its users of the unfortunate news, stating, “Tether has waged war against the Russian crypto market and blocked our wallets for more than 2.5 billion rubles.” The exchange went on to explain that it is temporarily halting all services, including cryptocurrency withdrawals, while its team works to resolve the issue. Despite the setback, Garantex reassured its users that they are fighting back and will not give up.
The situation has raised concerns among Russian users, with Garantex warning that “all USDT in Russian wallets is now at risk.” As of press time, Tether has not issued any public statements regarding the freeze, leaving many in the dark about the future of their investments.
Garantex’s troubles with Tether come on the heels of the exchange being sanctioned by the U.S. Treasury in 2022 for allegedly facilitating illicit transactions. Despite the restrictions, Garantex continued to operate, serving Russian users through sanctioned Russian banks. The European Union recently added Garantex to its sanctions list as part of a broader effort to target financial networks linked to Moscow.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) first blacklisted Garantex in April 2022, citing its role in processing transactions tied to illicit actors and darknet markets, including funds linked to the Russian Ransomware-as-a-Service group Conti and the now-defunct Hydra marketplace. The exchange’s involvement in such activities has drawn scrutiny from regulators and raised questions about its compliance with international sanctions.
The fallout from Tether’s freeze on Garantex has underscored the challenges facing the Russian crypto market, as regulatory pressures and geopolitical tensions continue to impact the industry. With the future of Garantex uncertain and Russian users facing potential losses, the incident serves as a stark reminder of the risks associated with investing in cryptocurrencies. As the situation unfolds, stakeholders will be closely monitoring developments to see how the market responds to this latest setback.