Tether Freezes $28 Million USDT on Russian Exchange Garantex

Garantex, a Russian crypto exchange under US sanctions, accused Tether of attacking the Russian crypto market. 

According to the exchange’s Telegram announcement, Tether has frozen several USDT wallets on the exchange, which are worth over $28 million. 

USDT Holders in Russia are At Risk

Garantex stated that USDT stablecoins in user wallets are at risk. Several USDT funds held by users in the exchange have been frozen. To manage the situation, Garantex has temporarily halted all operations. 

Co-founder Sergey Mendeleev stated that this action disrupts Russia’s international trade carried out with digital assets. 

“We temporarily suspend the provision of all services, including cryptocurrency findings, for a while while we are solving this problem with the whole team. We fight and don’t give up!” Garantex wrote on Telegram. 

Further, he warned that the freeze creates difficulties for businesses and financial institutions that depend on crypto to settle international payments. 

Back in December, Russia’s Finance Minister confirmed that the country has been increasingly using Bitcoin and other cryptocurrencies for international trade amid sanctions. 

“While we discussed easing tensions and relaxing sanctions, we were deceived once again. Suddenly, the paradigm shifted: earlier, sanctions were merely glossed over, but now they block without trial or investigation. This is exactly the reality I have warned about for at least two years, yet neither the Central Bank nor the professional community listened,” — wrote Mendeleev.

Mendeleev stressed that the disruption affects Russia’s economic engagements on a broader scale. Western sanctions have forced digital currencies to play a vital role in international settlements. The current incident further complicates those processes. 

The exchange’s claim draws attention to mounting regulatory pressure and a growing conflict between US authorities and market players operating in Russian jurisdictions.

Garantex Sanction Explained

State Duma deputy Anton Gorelkin added his perspective on the incident. He pointed out that Tether’s decision reflects a broader trend of pressure applied by Western regulators on crypto infrastructure amid ongoing sanctions. 

Gorelkin highlighted that centralized stablecoins like USDT remain particularly exposed to outside control. Despite the blockade, he expressed confidence that it is impossible to completely shut down the Russian crypto market. 

Garantex first encountered regulatory challenges in April 2022. US authorities imposed sanctions following the intensification of the conflict between Russia and Ukraine. 

Officials charged the exchange with failing to comply with anti-money laundering and counter-terrorism financing rules. US agencies claimed that Garantex played a role in laundering over $100 million linked to hacker groups and dark web transactions.

In March of last year, law enforcement agencies from the US and UK began an investigation into Garantex. They reviewed crypto transactions totaling more than $20 billion made using USDT. 

This probe reflects the ongoing tensions between regulators and crypto operators in sanctioned environments.