Stablecoin issuer Tether has frozen $27 million worth of USDT connected to Garantex, a sanctioned Russian crypto exchange, therefore severely hurting Russia’s crypto market. Garantex’s decision to halt all activities, including trading and withdrawals, has left many traders uncertain.
Claiming that Tether’s action fits under a larger crackdown on Russia’s digital asset ecosystem, the exchange confirmed the freeze in a March 6 Telegram statement. Garantex said, “Tether has entered the war against the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles.” The website of the platform is under maintenance right now; there is no obvious schedule for starting activities.
Mounting Regulatory Pressure
This development follows the European Union’s latest actions against Russian financial companies, which include sanctions on Garantex. Following similar measures by the U.S. Treasury Office of Foreign Assets Control (OFAC), which banned Garantex in April 2022 for allegedly supporting criminal activity, the exchange was included in the EU’s 16th sanctions package.
Authorities charge Garantex with facilitating darknet markets, financial transactions connected to ransomware activities, and sanctioned Russian banks. The platform kept running even with past penalties until this most recent action by Tether, therefore freezing its USDT liquidity.
Effect on Russian Crypto Marketers
Concerns among Russian crypto users have been raised by fund freezing; Garantex warns that all USDT kept in wallets connected to Russia could now be in danger. Declaring, “We will fight ; we will not give up,” the exchange promised to oppose the relocation. Still, the effects of the freeze might go beyond Garantex and influence other Russian platforms.
To get around limitations, crypto experts advise Russian traders to look for substitutes, including other stablecoins or distributed exchanges (DEXs). But with growing regulatory scrutiny, these choices might get more and more constrained.
The Prospect of Garantex and Russian Blockchain Markets
Garantex’s suspension draws attention to the increasing application of crypto space sanctions’ by authority. Russian exchanges find it more difficult to run unhindered as Western authorities are increasing control over digital asset transactions.
Although Garantex is looking at options to resume its operations, professionals think the road ahead will be difficult. The wider consequences imply that authorities worldwide are increasingly determined to limit Russia’s access to global crypto marketplaces. Major stablecoin issuers are following the sanctions, which could further disrupt the Russian crypto scene in the coming months.
