Tether Blocks Russian Crypto Exchange Garantex
MOSCOW, March 6 (Reuters) – Russian cryptocurrency exchange Garantex announced on Thursday that stablecoin Tether had blocked digital wallets on its platform. These wallets held over 2.5 billion roubles (approximately $28 million), forcing the exchange to suspend operations shortly after facing EU sanctions.
The European Union imposed sanctions on Garantex on February 24, as part of its 16th sanctions package against Russia related to the conflict in Ukraine. The EU accused the crypto exchange of having close ties to Russian banks already under EU sanctions and for helping to circumvent existing sanctions.
“We have bad news,” Garantex stated on Telegram. “Tether has entered the war against the Russian crypto market.”
A Tether spokesperson declined to offer further details when contacted for comment, directing inquiries to the U.S. Secret Service.
Garantex has temporarily suspended all services, including cryptocurrency withdrawals, according to their statement.
“We are fighting and will not give up,” Garantex said. “Please note that all USDT held in Russian wallets is now under threat.”
Cryptocurrency’s Role in a Sanctioned Economy
With limited access to the U.S. dollar and cut off from the SWIFT global payments network, some Russians have turned to cryptocurrencies as a means of moving money internationally. The Central Bank of Russia has also permitted businesses to use cryptocurrencies in global trade.
The United States designated Garantex as a “ransomware-enabling virtual currency exchange” in April 2022. The U.S. cited the company’s alleged tolerance of illicit actors’ abuse of its systems.
Russian Response
Russian lawmaker Anton Gorelkin accused Western countries of political motivations and predicted further pressure on Russia’s cryptocurrency infrastructure.
“To the investors who underestimated this risk, my condolences,” Gorelkin wrote on Telegram. “But it is worth recognising that it is impossible to completely block this market for Russia,” he added. He further stated that cryptocurrencies will remain an effective tool for circumventing sanctions, although USDT can be safely removed from that list.
( $1 = 89.2500 roubles)
(Reporting by Elena Fabrichnaya in Moscow and Alexander Marrow in London; Editing by Bernadette Baum, Alexandra Hudson)
