Tether freezes $27M on Garantex, forcing halt of Russian-linked exchange

Sanctioned crypto exchange Garantex has halted operations following Tether’s decision to freeze $27 million worth of USDT on the platform.

In a March 6 announcement on Telegram, the exchange confirmed a temporary suspension of crypto trading and withdrawals, citing Tether’s decision to freeze its funds.

According to the firm:

“Tether has entered the war against the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles. We are temporarily suspending all services, including cryptocurrency withdrawals, while our entire team solves this problem.”

Garantex warned that this action could set a precedent, putting all Russian USDT holdings at risk. The exchange vowed to challenge the decision, emphasizing that while it may be the first exchange affected, it likely will not be the last.

Tether has yet to provide an official response or explanation for the freeze. As of press time, the firm had not responded to CryptoSlate’s request for comment.

Tether is the issuer of USDT, the largest stablecoin with a market capitalization of more than $140 billion.

Garantex sanctions

This latest development follows mounting sanctions against Garantex over allegations that it helped Russia bypass Western financial restrictions.

The US Treasury’s Office of Foreign Assets Control (OFAC) first sanctioned the exchange in April 2022 as part of efforts to combat illicit financial activities.

More recently, the European Union also imposed sanctions on Garantex, citing its ties to Russian banks that were already under EU restrictions. This marked the first time the EU had directly sanctioned a Russian crypto exchange.

Meanwhile, authorities in the US and UK are also investigating Garantex for allegedly facilitating over $20 billion in transactions aimed at evading sanctions. Regulators suspect the platform played a role in Russia’s efforts to move funds, potentially contributing to its war-related financial strategies.