The US and UK governments have initiated a collaborative investigation into crypto transactions exceeding $20 billion that are suspected of breaching Russian sanctions. These transactions are believed to have been funneled through the Russian crypto exchange, Garantex, as a means to evade international sanctions and potentially fund military endeavors in Ukraine. Despite facing comprehensive sanctions, Russia has employed various methods to bypass these restrictions, such as engaging in offshore transactions, utilizing intermediary countries for tech exchanges, and leveraging encrypted digital currency transactions. These tactics have posed significant challenges for Western nations striving to sever financial support for Putin’s regime.
In response to the growing trend of using cryptocurrencies to circumvent sanctions, the US has escalated its crackdown on such activities. Recently, the US sanctioned crypto wallets associated with GAZA Now, a Moscow-based exchange that reportedly processed substantial amounts through Tether’s stablecoin USDT, despite facing sanctions from both the US and UK for alleged involvement in financial crimes and illicit transactions within Russia. The Biden administration has intensified its focus on crypto exchanges like Garantex in an effort to disrupt Russia’s financial channels and impede the flow of funds supporting destabilizing activities.
The investigation into the $20 billion worth of crypto transactions highlights the intricate battle waged to enforce financial sanctions effectively. While the probe is ongoing, there have been no direct accusations of wrongdoing against Tether Holdings. Tether Limited has affirmed its commitment to upholding compliance standards and collaborating with law enforcement agencies. The company has taken steps to freeze assets linked to entities on the US sanctions list, contributing to the fight against illicit financial practices. In contrast, Garantex has maintained silence regarding the investigation, raising questions about its involvement in facilitating transactions that contravene sanctions regulations.
Both the US Treasury and its UK counterparts, including the Treasury and National Crime Agency, have refrained from commenting on the ongoing investigation. Garantex, established in Estonia in 2019, later shifted most of its operations to Moscow after facing regulatory hurdles and the revocation of its operating license. The exchange has previously been accused by the US Treasury of engaging in illicit activities and disregarding anti-money laundering precautions. The collaboration between the US and UK governments underscores the significance of combating crypto transactions that violate sanctions and support illicit activities, signaling a concerted effort to disrupt financial networks that enable unlawful behavior on a global scale.
