Russian crypto exchange Garantex accused Tether of targeting the Russian crypto market, amid sanctions imposed by the US. In a recent Telegram announcement, Garantex revealed that Tether had frozen numerous USDT wallets on the platform, amounting to over $28 million.
The move has put USDT holders in Russia at risk, as stablecoins stored in user wallets on the exchange have been affected by the freeze. As a result, Garantex has temporarily suspended all its operations to address the situation.
Sergey Mendeleev, the co-founder of Garantex, condemned the action, emphasizing its impact on Russia’s international trade involving digital assets. Mendeleev expressed determination to resolve the issue with the team, stating, “We are temporarily suspending all services, including cryptocurrency withdrawals, while we work on solving this problem. We are fighting and will not give up!”
The freeze not only creates challenges for businesses and financial institutions relying on crypto for international payments but also complicates Russia’s economic engagements on a larger scale. With Western sanctions propelling digital currencies into a pivotal role in international settlements, the current incident exacerbates the complexities of such processes.
This development sheds light on the escalating regulatory pressures and the growing discord between US authorities and market participants operating within Russian jurisdictions. State Duma deputy Anton Gorelkin chimed in, highlighting Tether’s actions as part of a wider pattern of Western regulators squeezing crypto infrastructure amid ongoing sanctions.
Despite facing regulatory hurdles since April 2022, Garantex continues to operate amid challenges. US sanctions were initiated after allegations of non-compliance with anti-money laundering and counter-terrorism financing regulations. Authorities accused Garantex of being involved in laundering over $100 million associated with hacker groups and illicit dark web transactions.
In a previous investigation launched in March last year by US and UK law enforcement agencies, crypto transactions exceeding $20 billion involving USDT were scrutinized. This inquiry underscores the persistent tensions between regulators and crypto entities within sanctioned environments. Gorelkin remains resolute, asserting that while centralized stablecoins like USDT are vulnerable to external influences, shutting down the Russian crypto market entirely remains an impossibility amidst regulatory pressures.