Recently, an international law enforcement coalition, spearheaded by the United States Secret Service, has taken decisive action against the Russian cryptocurrency exchange Garantex, which had long been under scrutiny for facilitating money laundering operations for ransomware groups.
The now-dismantled Conti ransomware syndicate, among others, relied heavily on Garantex to launder their illicit proceeds. This exchange enabled ransomware operators to convert their extorted Bitcoin into stablecoins such as USDT, which were then transferred to other exchanges and eventually exchanged for fiat currencies like the U.S. dollar.
This multinational operation saw the involvement of numerous agencies, including the United States Secret Service, the U.S. Department of Justice, the Federal Bureau of Investigation, Europol, the Dutch National Police, the German Rhineland-Palatinate Criminal Police Office, the Frankfurt Public Prosecutor’s Office, the Finnish National Bureau of Investigation, and the Estonian National Police.
As a result, the Garantex website has been seized by law enforcement agencies. Additionally, reports suggest that Tether, the issuer of USDT stablecoin, has frozen 28 million USDT linked to Garantex.
The U.S. first imposed sanctions on Garantex in April 2022, when investigations revealed that over $100 million worth of transactions on the platform were connected to criminal enterprises and darknet marketplaces. Among these illicit funds were $6 million in cryptocurrency extorted by Conti and $2.6 million tied to the online marketplace Hydra.
Both Conti and Hydra were subsequently dismantled in coordinated operations by U.S. and German law enforcement. However, Garantex continued its operations and was later sanctioned by the European Union for assisting Russian banks in evading EU-imposed financial restrictions. The EU explicitly prohibited individuals and businesses within its jurisdiction from engaging with the exchange.
Furthermore, the U.S. Department of Justice had previously sanctioned another Russian cryptocurrency exchange, ChatEx, in 2021, citing its involvement in facilitating money laundering for cybercriminal networks through conversational cryptocurrency transactions.
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