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Tether has frozen 27 million USDT (approximately 2.5 billion rubles) on the Russian cryptocurrency exchange Garantex, which is currently under sanctions. This move comes amid increasing scrutiny of the exchange's operations and its connections to illicit activities.
Key Takeaways
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Tether has frozen $27 million USDT on Garantex, a sanctioned Russian exchange.
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Garantex has suspended all operations, including withdrawals and transactions.
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The exchange is under investigation for potential sanctions breaches linked to illegal transactions.
Garantex's Response to the Freeze
Garantex confirmed the freeze via a Telegram announcement, stating that Tether has halted access to its funds.
The exchange's website is currently undergoing maintenance, and users have been warned that all USDT in Russian wallets are at risk. This suspension of services has raised concerns among users about the future of their assets on the platform.
Garantex halted operations amid the asset freeze. Source: Garantex.org
Background on Sanctions Against Garantex
The European Union included Garantex in its 16th package of sanctions against Russia on February 26, following earlier sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) in April 2022. These sanctions were a response to Garantex's involvement in illegal transactions and its failure to comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.
Reports indicate that Garantex has processed over $100 million in transactions linked to criminal activities, including connections to the Russian Ransomware-as-a-Service group Conti and the now-defunct Hydra marketplace. This has led to heightened regulatory scrutiny and investigations into the exchange's operations.
Ongoing Investigations
The U.S. and U.K. authorities are currently investigating over $20 billion in USDT transactions processed through Garantex. These investigations could represent one of the largest breaches of sanctions imposed on Russia since the onset of the Ukraine conflict. However, officials have clarified that the investigations are still ongoing, and no conclusions regarding Tether's involvement have been reached.
Tether's Commitment to Compliance
Tether's decision to freeze the funds on Garantex underscores its commitment to cooperating with law enforcement agencies in combating criminal activity. The company has previously assisted U.S. authorities, including the Department of Justice (DOJ) and the FBI, in seizing $1.4 million USDT from a tech support scam network. This proactive approach highlights Tether's dedication to maintaining the integrity of its operations and ensuring compliance with international regulations.
As the situation develops, the cryptocurrency community will be watching closely to see how Tether and Garantex navigate these challenges and what implications this may have for the broader market.
Sources
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Tether Freeze $27M USDT on Russian Exchange Garantex, NameCoinNews.