US, UK Probe Multibillion-Dollar Crypto Transfers Tied to Sanctioned Exchange

The US and UK are reportedly investigating over $20 billion in crypto transfers through sanctioned Russian exchange Garantex using Tether's USDT stablecoin. The payments under probe occurred after Garantex's sanctioning for alleged illicit transactions and financial crimes in Russia. While the crypto transactions represent a significant potential breach of sanctions, the investigation is ongoing, and no conclusions or implications for Tether have been made.

U.S. and UK Investigate Multi-Billion Dollar Crypto Transfers Linked to Sanctioned Exchange

Washington/London, March 28, 2023 - The United States and United Kingdom are scrutinizing billions of dollars' worth of cryptocurrency transactions allegedly sent through the Russia-based crypto exchange Garantex, according to a recent Bloomberg report. The transfers, said to have utilized the dollar-pegged stablecoin Tether (USDT), are being investigated for potential breaches of sanctions imposed on Russia since the commencement of the Ukraine conflict.

Sanctioned Exchange Under Investigation

In April 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) designated both Garantex and the Hydra Market as sanctioned entities due to their alleged involvement in facilitating ransomware attacks and illicit darknet drug trade. Despite its initial establishment in Estonia in 2019, the U.S. asserts that Garantex's operations are primarily conducted from the Federation Tower in Moscow.

Probe into $20 Billion Transfers

The Bloomberg report, citing unnamed sources familiar with the matter, claims that the U.S. and UK are jointly reviewing over $20 billion in cryptocurrency transfers suspected of passing through Garantex using USDT. These payments allegedly occurred after the imposition of sanctions against Garantex, prompting suspicion of circumventing measures intended to isolate Russia financially.

The complexity of digital asset payments is said to complicate the investigation, making it premature to draw definitive conclusions at this stage. Nevertheless, the magnitude of the suspected crypto transactions, if confirmed, would represent a significant violation of the sanctions regime.

Tether's Involvement

The report also notes that the investigation has not yet suggested any wrongdoing on the part of Tether, the issuer of USDT. However, it is acknowledged that Tether has collaborated with law enforcement to freeze assets linked to entities identified on the U.S. sanctions list.

Ongoing Inquiries

The U.S. and UK authorities continue their inquiries, seeking to determine the full extent of the alleged illicit transfers and potential sanctions violations. The outcome of these investigations has the potential to further tighten the financial net around Russia and send a strong message to those seeking to circumvent sanctions.