The Russian cryptocurrency exchange Garantex is under investigation by authorities in the USA and the UK following its facilitation of $20 billion worth of tether transfers.

United State USA diplomat
United State (USA)

Officials from both countries are reportedly examining the USDT transactions that took place on the platform after its sanctioning by the US Department of the Treasury in April 2022.

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According to reports from Bitcoin News, the $20 billion in tether transactions represented the most significant breach of sanctions imposed on Russia following its invasion of Ukraine in February 2022.

These transfers underscore the challenges in preventing funds from flowing into Russia after it has been subjected to sanctions by Western nations.

Digital currencies and crude oil sales are believed to be the primary sources of foreign exchange for Russia, allowing the government to sustain the country’s economy despite the sanctions.

In light of the limited impact of traditional sanctions on Russia’s economy, the Biden administration has shifted its focus towards scrutinizing digital currency transactions and issuers like Tether.

While ongoing investigations by US and UK authorities have not uncovered any misconduct by Tether, the stablecoin issuer has stated its cooperation with authorities by freezing assets belonging to sanctioned entities.

In response, the Garantex crypto exchange has expressed its full commitment to collaborating with international regulators and diligently eliminating criminal elements from its platform.

However, Garantex has indicated on its website that it will continue to engage with sanctioned Russian banks.

Key Points to Note:

– US and UK authorities escalated pressure on Garantex following discussions by a senior executive about utilizing cryptocurrency for foreign exchange.
– Bitpapa, a nascent peer-to-peer crypto exchange, has also faced sanctions from US and UK authorities over alleged connections to Garantex.