UK, US Probe $20B in USDT Transfers by Sanctioned Russian Crypto Exchange

The U.K. and the U.S. are reviewing tether transactions, valued at $20 billion, processed by the sanctioned cryptocurrency exchange Garantex. Digital currency transactions and crude oil sales are believed to be a significant source of foreign currency for Russia.

Russia Sanctions Busting

The U.K. and the U.S. are reportedly reviewing cryptocurrency transactions valued at $20 billion, processed by the sanctioned Russian crypto exchange Garantex. Officials from both countries are said to be interested in tether (USDT) payments made through the exchange after it was sanctioned by the U.S. Department of Treasury in April 2022.

According to a report by Bloomberg, these transfers potentially represent the largest breach of sanctions imposed shortly after Russia invaded Ukraine in February 2022. They also underscore the struggle of Western countries to stem the flow of funds into Russia, despite a highly coordinated sanctions regime.

Digital currency transactions, alongside crude oil sales, are believed to be a significant source of foreign currency for Moscow. Through these sources, Moscow has successfully managed to keep the Russian economy afloat despite the sanctions. The apparent failure of the sanctions regime has prompted the Biden administration to focus more on crypto exchanges and digital currency issuers like Tether.

As explained in the report, the ongoing inquiry by the U.S. and U.K. has not found any wrongdoing by Tether. However, the stablecoin issuer, for its part, said that it has cooperated with authorities by freezing assets belonging to sanctioned entities.

“With Tether, every action is online, every transaction is traceable, every asset can be seized, and every criminal can be caught. We work with law enforcement to do exactly that,” Tether reportedly said.

Meanwhile, Garantex, similar to Tether, has stated its cooperation with international law enforcement agencies and its active efforts to block transactions associated with criminal organizations. Still, Garantex also confirms on its website that it continues to work with sanctioned Russian banks.

This admission, coupled with claims that a senior Garantex executive recently discussed using cryptocurrency to acquire foreign exchange, has led U.S. authorities to maintain pressure on the cryptocurrency exchange. As reported by Bloomberg, the U.S. recently added the peer-to-peer platform Bitpapa to its list of sanctioned entities. Bitpapa is believed to be connected to Garantex.

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