Tether Freezes $27M in USDT on Russian Exchange Garantex

Highlights:

• Tether has frozen USDT belonging to Garantex and has caused the exchange to halt operations.
• The EU sanctioned Garantex due to its links to Russian banks that have already been sanctioned.
• Analysts predict that more restrictions may be imposed on financial entities tied to Russia.

Tether has frozen $27 million worth of USDT linked to Garantex, a Russian cryptocurrency exchange that is facing sanctions. Garantex announced the freeze on March 6 through its Telegram channel, warning users that all USDT held in Russian wallets could be at risk. The exchange confirmed that it has temporarily suspended trading and withdrawals while its team works on addressing the issue.

Stablecoin issuer Tether has frozen $27 million worth of USDT on the Russian crypto exchange Garantex, causing the platform to suspend all trading and withdrawal services. The U.S. Treasury Department imposed sanctions on Garantex as early as April 2022. https://t.co/N7V2ElB2Pf

— Wu Blockchain (@WuBlockchain) March 6, 2025

Users cannot access the website at the moment as it is displaying that it is under maintenance. The freezing of the assets by Tether has impacted Garantex, which is continuing to run following an earlier sanctions measure.

According to Garantex, the Tether move is part of the ongoing crackdown on the Russian crypto market. Meanwhile, it warned that this could be a precedent for additional asset freezes of Russian users. The exchange told its users that it will not give up and is still trying to find solutions in regard to the situation. Once the problem is resolved, the exchange has promised its customers that it will continue to operate.

Sanctions on Garantex and Its Connections to Russian Banks

The European Union sanctioned the Guarantee as one of the 16th package of restrictions due to the Russia-Ukraine conflict. According to the statement, Garantex is the first Russian crypto exchange to be targeted by the European Council. Authorities revealed that several major Russian banks, which have already been sanctioned, were linked to Garantex.

The Council of the European Union added Russian cryptocurrency exchange Garantex to their latest sanctions package last week for being “closely associated with EU-sanctioned Russian banks,” marking the council’s first time sanctioning a crypto exchange. https://t.co/25TPGlqbsu

— ICIJ (@ICIJorg) March 4, 2025

The EU has accused Garantex of helping banks access the international financial system. Traders reportedly used the exchange to complete transactions by converting rubles from bank accounts to cryptocurrency and then trading it for a different currency.

The United States had already imposed sanctions on Garantex before the EU decision. The exchange was sanctioned by the US Treasury’s Office of Foreign Assets Control three years ago for its connections to criminal activities. The United Kingdom also sanctioned Garantex because it was processing transactions for sanctioned entities.

The decision to sanction Garantex came just before the third anniversary of Russia’s military actions in Ukraine. The sanctions were designed to hit banks and digital asset exchanges that allegedly provided financial support for Russia’s activities.

Recently. TRON, Tether, and TRM Labs formed the T3 Financial Crime Unit, a joint initiative to combat the illegal use of USDT on the TRON blockchain. The initiative hopes to ensure the proper use of blockchain technology.

Effects of the USDT Freeze on the Russian Crypto Industry

The freezing of USDT on Garantex may lead to further restrictions on the Russian cryptocurrency market, Russian lawmakers have warned. Deputy head of the Russian parliament’s committee on information policy, Anton Gorelkin, said this won’t be the end of Western financial pressure on Russian exchanges. At the same time, he noted that the restrictions can be increased, but blocking the cryptocurrency transaction within Russia is impossible.

Despite sanctions, Garantex has vowed to challenge the freeze and continue operating. The exchange warned users to be on the lookout for similar measures against other Russian platforms in the future.