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

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has again placed the cryptocurrency exchange Garantex Europe on its sanctions list, marking the second time the entity faces such restrictions. The redesignation comes in response to allegations that Garantex has engaged in sanctions evasion and facilitated illicit financial activity. OFAC accused the exchange of processing over $100 million in transactions linked to criminal enterprises, including ransomware operations, since 2019 [1].

Garantex is said to have created a successor platform, Grinex, in an attempt to evade prior U.S. enforcement actions. The original sanctions, imposed in 2022, cited the exchange for willfully disregarding Anti-Money Laundering and Combating the Financing of Terrorism requirements. Measures taken at the time included the confiscation of $26 million in crypto assets, the seizure of the platform’s website, and the indictment of two executives [1]. OFAC has now extended these sanctions, adding several Bitcoin, Ethereum, and Tron wallet addresses associated with the exchange to the Specially Designated Nationals (SDN) list [1].

Garantex founder Aleksandr Mira Serda remains at large, despite the unsealing of indictments against him and co-executive Aleksej Besciokov in March. Besciokov was arrested while on holiday in India and is now facing charges for conspiracy to commit money laundering, conspiracy to violate U.S. sanctions, and conspiracy to operate an unlicensed money services business. A U.S. District Court ordered a corrected warrant for Mira Serda’s arrest on August 6, with the U.S. government offering up to $6 million in rewards for information leading to the arrest of either him or other Garantex executives [1].

The U.S. Treasury emphasized that the enforcement actions signal a broader strategy to combat the misuse of digital assets for cybercrime and sanctions evasion. “Digital assets play a crucial role in global innovation and economic development,” said John Hurley, under secretary of the Treasury for terrorism and financial intelligence, “but the United States will not tolerate abuse of this industry to support cybercrime and sanctions evasion” [1].

The actions against Garantex and Grinex reflect growing concerns about the role of stablecoins in facilitating illicit financial flows. OFAC has increasingly focused on digital assets as a key component of its enforcement strategy, extending its reach beyond traditional financial systems to include a diverse range of crypto platforms [6]. The expansion of the SDN list to include more digital asset addresses and platforms demonstrates the U.S. government’s intent to monitor and control the use of cryptocurrencies in sanction-busting networks [7].

The redesignation of Garantex and its affiliated platforms underscores the importance of global cooperation in countering financial crime. The U.S. Secret Service, in coordination with German and Finnish authorities, had previously taken action against Garantex, including the seizure of its web domain and the freezing of $26 million in crypto [2]. These efforts highlight the need for international collaboration to address the challenges posed by the evolving digital financial landscape.

Source: [1] Cointelegraph https://cointelegraph.com/news/us-treasury-ofac-sanctions-garantex-europe

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

[6] AInvest https://www.ainvest.com/news/treasury-redesignates-garantex-sanctions-evasion-illicit-crypto-activity-2508/

[7] SSBCrack https://news.ssbcrack.com/u-s-targets-russian-cryptocurrency-exchange-garantex-for-cybercrime-links/