- Two governments are reportedly probilling billions in crypto transfers.
- The transfers were sent via a sanctioned exchange.
- Sources familiar with the matter said a stablecoin was used in the transfers.
The U.S. and UK are reportedly investigating digital asset transactions worth billions sent through Russia-based crypto exchange Garantex using a dollar-pegged stablecoin.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Garantex and Hydra Market in April 2022 due to their alleged connection with ransomware gangs and dark net drugs markets. While the exchange was founded in 2019 in Estonia, the U.S. claims most of its activities are now based out of Federation Tower in Moscow.
Probing $20B Crypto Transfers to Garantex
According to a Bloomberg report on March 28, the U.S. and UK are jointly “reviewing” over $20 billion of cryptocurrency transactions believed to have been sent through Garantex using Tether’s stablecoin USDT.
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Citing people familiar with the matter, the report said the payments under probe took place after Garantex was sanctioned by the U.S. and UK on suspicion of enabling illicit transactions and financial crimes in Russia.
Per the source, while the $20 billion crypto transactions would represent among the biggest breaches of the sanctions imposed on Russia since the start of the war in Ukraine, it is “too early to anticipate conclusions” given the complexity of digital asset payments.
The source further intimated that the inquiry has yet to arrive at an “immediate suggestion” of wrongdoing by USDT issuer Tether. In response, the report quoted Tether saying that it has worked with law enforcement to freeze the assets of entities with addresses listed on the U.S.’s sanctions list.
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