The Russian cryptocurrency exchange, Garantex, announced a temporary suspension of all services on March 6th, 2025, citing the freezing of about $27 million (2.5 billion rubles) worth of Tether (USDT) in its wallets.
This action by Tether represents a significant escalation in the ongoing conflict surrounding cryptocurrency and sanctions imposed on Russia.
Garantex Declares Tether ‘War’
In a Telegram statement, Garantex declared that Tether had initiated what they termed a “war” against the Russian crypto market, resulting in the blocking of their funds. The exchange immediately suspended all services, including cryptocurrency withdrawals, while its team works to resolve the situation.
Garantex’s explicit warning to Russian users highlights the urgency of the announcement: all USDT in Russian wallets is now vulnerable. Moreover, the freezing of Garantex’s USDT reserves represents a dramatic escalation in the efforts to curtail financial activities linked to Russia. Tether’s actions will have long-term implications, and its potential effects on the broader Russian cryptocurrency market remain uncertain.
However, this development follows a pattern of increased scrutiny surrounding Tether’s operations. While Tether has yet to publicly comment on the matter, the company has previously faced intense scrutiny regarding its dealings with entities linked to Russia.
Notably, the exchange was already sanctioned by the U.S. Treasury Department in 2022 for allegedly facilitating illicit transactions, a designation that continued even after the imposition of further sanctions by the European Union. Despite these sanctions, Garantex persisted in its operations, primarily serving Russian users through sanctioned Russian banks.
EU Sanctions Garantex
The European Union added Russian cryptocurrency exchange Garantex to its sanctions list last week. They said Garantex is linked to Russian banks that are already under sanctions. This is the first time the EU has sanctioned a crypto exchange.
The U.S. also sanctioned Garantex in April 2022. The EU action comes after a report found that a company connected to Garantex shares a debt collection business with a convicted criminal. It also has ties to Rosneft, a Russian oil company.
The EU said these sanctions target people and groups trying to get around EU sanctions. The EU says it will continue to put pressure on Russia. Garantex started in 2019. It was first registered in Estonia. The founders were Stanislav Drugalev, a Russian tech expert, and Sergey Mendeleev, a Moscow politician. Aleksandr Ntifo-Siao was also a co-owner.
