The US and the UK are investigating Garantex, a Russian cryptocurrency exchange, following its facilitation of $20 billion worth of tether transfers.
Officials from both countries are reportedly interested in the USDT transactions conducted on the platform after it was sanctioned by the US Department of Treasury in April 2022.
According to Bitcoin News, the $20 billion worth of tether transactions represents the most significant breach of sanctions imposed on Russia after its invasion of Ukraine in February 2022.
These transfers also underscore the challenges in restricting money flow into Russia after it has been sanctioned by Western powers.
Digital currencies and crude oil sales are believed to be the primary sources of foreign exchange for Russia. Despite the sanctions, the Russian government has managed to sustain the country’s economy through these two major channels.
The Biden administration has shifted its focus towards digital currency transactions and issuers like Tether after previous attempts to sanction Russia failed to significantly impact its economy.
As of now, ongoing investigations by US and UK authorities have not found any wrongdoing by Tether. The stablecoin issuer has stated that it is cooperating with authorities by freezing assets belonging to sanctioned entities.
In response, Garantex crypto exchange has expressed its full commitment to collaborating with international regulators and diligently endeavors to purge its platform of criminal entities.
However, Garantex has stated on its website that it will continue to work with sanctioned Russian banks.
US and UK authorities have increased pressure on Garantex after a senior executive from the country discussed the use of cryptocurrency to acquire foreign exchange.
Additionally, Bitpapa, a fledgling peer-to-peer crypto exchange, has also been sanctioned by US and UK authorities due to its suspected connection to Garantex.
