The US and UK governments have initiated a collaborative inquiry into cryptocurrency transactions exceeding $20 billion, potentially breaching Russian sanctions, as reported by Bloomberg News on March 28.

These transactions, suspected of utilizing the Russia-based crypto exchange Garantex, are believed to be aimed at circumventing international sanctions and potentially financing military activities in Ukraine. Amidst an increasing crackdown on crypto-enabled evasion of sanctions, the US recently sanctioned crypto wallets associated with GAZA Now. Garantex, based in Moscow, purportedly processed these substantial sums using Tether’s USDT stablecoin despite being subject to sanctions by both countries for alleged involvement in financial crimes and facilitating illicit transactions within Russia.

Despite robust sanctions against Russia, Western nations face challenges in blocking financial inflows into the country. Russia employs various strategies, including offshore transactions, tech exchanges via intermediary nations, and encrypted digital currency transactions, complicating efforts to cut off financial support for Putin’s regime.

The Biden administration has escalated efforts to disrupt Russia’s financial channels, focusing on crypto exchanges like Garantex. While the $20 billion probe is ongoing, there have been no direct allegations of misconduct against Tether Holdings. Tether Limited has affirmed its commitment to compliance standards and cooperation with law enforcement, freezing assets linked to entities on the US sanctions list to combat illicit financial activities.

Garantex has yet to comment on the investigation. Both the US Treasury and UK counterparts, including the Treasury and National Crime Agency, have refrained from providing statements on the inquiry. Founded in Estonia in 2019, Garantex relocated most operations to Moscow following regulatory challenges and the revocation of its operating license, facing prior accusations from the US Treasury of engaging in illegal activities and disregarding anti-money laundering protocols.