US and UK Authorities Probe Cryptocurrency Transactions to Russian Exchange

American and British enforcement agencies are scrutinizing crypto transactions for possible ties to Russia.

According to a report by Bloomberg, the Russian cryptocurrency platform Garantex may have facilitated the transfer of funds exceeding $20 billion, now under the lens of U.S. and U.K. authorities as a part of their joint efforts to thwart sanction dodging that may aid Russia’s military actions in Ukraine.

The focus is on transactions involving the Tether (USDT) stablecoin through Garantex of Moscow, particularly after the imposition of U.S. and U.K. sanctions against the exchange for its alleged role in promoting illegal financial activities within Russia.

The Biden administration in the United States has pinpointed crypto exchanges such as Garantex for stringent actions since the onset of the Ukrainian conflict. The reported sum of $20 billion is being regarded as one of the most critical attempts to breach the sanctions enforced on Russia.

“In the world of Tether, each operation is transparent, every ledger entry is traceable, all assets have the potential for confiscation, and every offender can be tracked down.”

Statement by Tether Holdings

The Office of Foreign Assets Control (OFAC) introduced sanctions against Garantex in April 2022 concurrently with the blacklisted darknet marketplace Hydra and tagged Russia as a safe harbor for cybercriminals. OFAC criticized the exchange’s modus operandi of overlooking regulations against money laundering and terrorism financing, operated from Moscow City’s Federation Tower.

As the war in Ukraine escalated, western nations enacted stringent sanctions against Russia, raising alerts amongst regulators over cryptocurrencies being potentially used to bypass these sanctions.

The U.S. Department of the Treasury thus extended its list of sanctioned entities in March, adding 13 companies and two individuals related to the cryptocurrency market.

Brian Nelson, U.S. Treasury’s Undersecretary for Terrorism and Financial Intelligence, indicated Russia’s shift towards other financial solutions to sidestep American sanctions and sustain its military campaign in Ukraine.

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