Garantex Sanctioned by the US for Laundering Over $100 Million

  • Richard Marley
  • April 07, 2022
  • 2 minutes read
  • 2189

The US Treasury Department has sanctioned the virtual currency exchange Garantex for facilitating transactions of the Conti ransomware group.

The crypto exchange was sanctioned this Tuesday, April 5 by the US Treasury’s Office of Foreign Assets Control (OFAC). The OFAC announced in a press release that there was a total of $100 million in losses due to illicit transactions. 

Approximately $6 million of the total was linked to the Conti ransomware group. Conti ransomware group has previously supported Russia in the ongoing war and is still operational even after recently leaked source code.

Garantex is the third virtual currency exchange to get sanctioned in the last year, after Suex in September and Chatex in November. According to the press release, all three virtual currency exchanges operated from the Federation Tower in Moscow.

Established in late 2019, Garantex was initially operating in Estonia. However, in February of the next year, the Estonia Financial Intelligence Unit revoked its license after it “found connections between Garantex and wallets used for criminal activity.” That did not stop them from providing “services to customers through unscrupulous means”, according to the release.

The Treasury Department also stated that it coordinated with Estonian authorities before imposing the sanctions. This was the second coordination effort with the Estonian government in the last six months, according to the release.

The OFAC’s sanctions against Garantex align with recent actions taken against Russia after the invasion of Ukraine. OFAC stated that it is “closely monitoring any efforts to circumvent or violate” sanctions related to Russia, which includes the use of virtual currency.

“Today’s actions also reinforced OFAC’s recent public guidance to further cut off avenues for potential sanctions evasion by Russia, in support of the G7 leaders’ commitment to maintaining the effectiveness of economic measures,” the release said.

The sanctions are applicable to “any entities that are owned, directly or indirectly” by Garantex, which can be difficult to assess when it comes to ransom demands.

Suggested read: US DOJ Stresses Disclosure of Beneficial Ownership Information to Curb Illicit Finance