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    US, UK initiate joint probe into $20 billion moved via crypto to evade Russian sanctions

    2024.03.30 | exchangesranking | 45onlookers
    The US and UK governments have launched a joint investigation into crypto transactions worth over $20 billion that may have violated Russian sanctions, Bloomberg News reported on March 28.

    The transactions, suspected of being routed through the Russia-based crypto exchange Garantex, aim to evade international sanctions and potentially fund military activities in Ukraine.

    In recent months, the US has been increasingly cracking down on the use of crypto to evade sanctions. It most recently sanctioned crypto wallets linked to GAZA Now.

    Sanction evasion

    The Moscow-based exchange allegedly processed these significant amounts using Tether’s stablecoin USDT despite sanctions imposed on it by both countries for its supposed role in financial crimes and facilitating illicit transactions within Russia.

    Despite the comprehensive sanctions against Russia, Western nations have encountered challenges in sealing off financial inflows into the country.

    Russia reportedly adopts various strategies to skirt these sanctions, including conducting offshore transactions, tech exchanges through intermediary nations, and utilizing encrypted digital currency transactions, complicating the West’s efforts to cut off financial support for Putin’s regime.

    The Biden administration has intensified its focus on crypto exchanges like Garantex to disrupt Russia’s financial channels. The $20 billion under scrutiny highlights the complex battle to implement financial sanctions effectively.

    While the probe is ongoing, there has been no direct accusation of misconduct against Tether Holdings.

    Tether’s response

    In a statement, Tether Limited expressed its commitment to adhering to compliance standards and its ongoing cooperation with law enforcement bodies. The company has taken measures to freeze assets linked to entities on the US sanctions list, aiding in the fight against illicit financial activities.

    Garantex has remained silent in light of the investigation. Both the US Treasury and the UK’s counterparts, including the Treasury and National Crime Agency, have refrained from commenting on the ongoing investigation.

    Garantex was founded in Estonia in 2019 and later relocated most of its operations to Moscow following regulatory challenges and the revocation of its operating license.

    The exchange has previously faced accusations from the US Treasury of engaging in illegal activities and ignoring anti-money laundering protocols.

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