Garantex Operators Launch Grinex to Evade US Sanctions

Operators of the sanctioned cryptocurrency exchange Garantex have reportedly launched a new trading platform, Grinex, in an effort to evade US sanctions. According to blockchain analytics firm Global Ledger, Grinex is effectively a continuation of Garantex, which was blacklisted by US authorities for allegedly facilitating illicit financial transactions. The firm’s investigation revealed that Grinex was set up shortly after Garantex’s abrupt downfall, following a coordinated crackdown by the US Department of Justice (DOJ) and European authorities. The analytics firm asserts that conclusive onchain evidence directly links Grinex to Garantex, reinforcing concerns that the operators are circumventing international sanctions.

Global Ledger stated in its report that "Grinex is not an independent entity but rather a full-fledged successor to Garantex, continuing its financial operations despite the exchange’s official shutdown." The DOJ, in collaboration with authorities from Germany and Finland, recently froze several domains linked to Garantex, a move aimed at dismantling its infrastructure. Since its inception in 2019, Garantex reportedly processed over $96 billion in illicit funds, playing a crucial role in laundering proceeds from darknet markets and ransomware attacks, according to US officials.

In April 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Garantex, marking it as the third-largest crypto exchange ever to face such penalties. Despite these sanctions, blockchain analytics firm Elliptic later reported that the exchange continued transacting approximately $60 billion in crypto following its blacklisting. The crackdown on Garantex escalated earlier this year when US authorities issued criminal indictments against its principal operators, Aleksej Besciokov and Aleksandr Mira Serda. Besciokov has since been detained in India and is currently facing extradition to the United States. Mira Serda, however, remains at large.

With mounting pressure on Garantex, its operators appear to have shifted liquidity and user funds to Grinex, using it as a workaround to continue operations under a new name. Global Ledger's investigation found that Grinex is using identical infrastructure to Garantex, suggesting a direct transfer of its technology, assets, and customer base. Onchain data indicates that between Feb. 8 and March 1, Garantex facilitated the movement of billions of A7A5 stablecoin tokens on the Tron blockchain to addresses controlled by Grinex. The A7A5 stablecoin, issued by Russia’s Promsvyazbank through its cross-border payment platform A7, is reportedly being used as a ruble-backed digital currency to support Grinex’s liquidity. The findings suggest that Grinex has already processed nearly $30 million in transactions, further solidifying its operational status as an active exchange.

The emergence of Grinex presents a significant challenge for global regulators seeking to clamp down on illicit financial networks within the crypto ecosystem. The United States and its allies have repeatedly warned that Russian-linked financial entities and exchanges are actively developing ways to bypass sanctions and continue facilitating unlawful transactions. Tether, the issuer of the world’s largest stablecoin, has already responded to enforcement efforts by freezing $23 million worth of USDT linked to Garantex, showcasing a coordinated industry response to illicit crypto activity. However, the creation of Grinex raises concerns about the effectiveness of existing measures and the ability of sanctioned entities to persist through strategic rebranding.

The revelations from Global Ledger’s report are expected to prompt additional action from US authorities and their international partners. Investigations into Grinex’s activities could lead to further domain seizures, asset freezes, and even secondary sanctions against entities providing financial infrastructure to the new exchange. Additionally, Promsvyazbank’s involvement in issuing the A7A5 stablecoin could bring increased scrutiny to Russian banks and financial institutions facilitating crypto transactions for sanctioned actors. If confirmed, it may result in broader enforcement measures targeting Russian digital payment platforms. As authorities ramp up their efforts to curb crypto-based money laundering, the battle between regulators and illicit financial networks is poised to intensify.