U.S. Treasury Redesignates Garantex Over Sanctions Evasion and Illicit Crypto Activity

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has redesignated cryptocurrency exchange Garantex Europe to its sanctions list, marking the second time the platform has been penalized for facilitating illicit transactions and sanctions evasion [1]. According to the agency, Garantex and its successor platform, Grinex, have been accused of enabling money laundering and the evasion of U.S. economic sanctions. The redesignation includes sanctions on three Garantex executives, six Russian- and Kyrgyz Republic-based companies, and several cryptocurrency wallet addresses tied to Bitcoin (BTC), Ether (ETH), and Tron (TRX) [3].

The U.S. government alleges that Garantex processed more than $100 million in illicit transactions since 2019, including activities linked to ransomware attacks and darknet markets [4]. Following the initial 2022 sanctions, which cited the platform’s willful disregard of anti-money laundering (AML) and counter-terrorist financing (CTF) standards, Garantex allegedly continued its operations by creating Grinex to evade enforcement measures [1].

In March 2025, U.S. and international law enforcement agencies, including the U.S. Secret Service and authorities from Germany and Finland, seized Garantex’s web domain and froze approximately $26 million in cryptocurrency, primarily in Tether (USDT), with support from the stablecoin’s issuer [6]. The takedown led to the emergence of Grinex, a Kyrgyzstan-registered platform that is believed to have inherited customer bases and operations from Garantex. Some users reportedly moved their assets to Grinex after the seizure [3].

Garantex and its affiliates were also involved in the development of the A7A5 token, a Russian ruble-backed stablecoin created under Kyrgyzstani regulations. The token is designed to enable cross-border transactions and is linked to sanctioned Russian financial institutions, including Promsvyazbank (PSB) [3]. A7A5 has seen over $51.17 billion in trading volume through July 2025, largely on platforms with Russian ties. The token’s decentralized exchange (DEX) allows swaps with mainstream stablecoins, raising concerns about its potential to integrate into the broader crypto ecosystem [3].

Key Garantex executives, including Sergey Mendeleev, Aleksandr Mira Serda, and Pavel Karavatsky, have been designated by OFAC for their roles in enabling the exchange’s operations and supporting illicit financial flows. These individuals have been linked to the maintenance of Garantex’s infrastructure, the legitimization of its services, and the facilitation of fund movements through partner networks [3]. The enforcement action also targets affiliated entities such as InDeFi Bank and Exved, which are accused of enabling crypto-mediated trade to bypass sanctions [3].

The sanctions underscore the U.S. Treasury’s efforts to disrupt Russian attempts to build alternative financial systems using cryptocurrency. The A7A5 token and associated platforms represent a strategic tool for Russia to circumvent Western economic restrictions. This action aligns with broader Russian legislation enacted in 2024 that legalizes the use of cryptocurrency for cross-border payments [3]. The enforcement highlights the evolving tactics of Russian-linked entities in leveraging digital assets for illicit financial activity and the growing importance of blockchain transparency in tracking and disrupting such networks [3].

Source:

[1] US Treasury's OFAC Sanctions Crypto Exchange Garantex (Cointelegraph)

https://cointelegraph.com/news/us-treasury-ofac-sanctions-garantex-europe

[2] US Department Of Treasury Sanctions Crypto Exchange (Crowdfund)

https://www.crowdfundinsider.com/2025/08/247577-us-department-of-treasury-sanctions-crypto-exchange-garantex-europe/

[3] How A7A5 and Grinex Enable The Russian Crypto Economy (Chainalysis)

https://www.chainalysis.com/blog/a7a5-grinex-russian-crypto-economy-ofac-sanctions-august-2025/

[4] US Treasury re-designates Garantex crypto exchange for (Investing.com)

https://www.investing.com/news/economy-news/us-treasury-redesignates-garantex-crypto-exchange-for-illicit-activities-93CH-4192933

[6] OFAC targets Kyrgyzstan-based firms, stablecoins over (CryptoSlate)

https://cryptoslate.com/ofac-targets-kyrgyzstan-based-firms-stablecoins-over-russian-sanctions-violations/