Conctived Crypto Exchange Garantex has stopped operations after Tether decided to freeze $27 million worth of USDT on its platform.
In its March 6 announcement on Telegram, the exchange confirmed a temporary suspension of crypto trading and withdrawals, citing Tether's decision to freeze funds.
According to the company:
“Tether took part in the war with the Russian crypto market, blocking more than 2.5 billion rubles of wallets. We have temporarily suspended all services, including cryptocurrency withdrawals, but our entire team is solving this issue.”
Garantex warned that the measure could set precedent and put all Russian USDT holdings at risk. The exchange vowed to challenge the decision, emphasizing that it may be the exchange that was first affected, but it would probably not be the last.
Tether has not yet provided an official response or explanation for the freeze. At the time of reporting, the company had not responded to Cryptoslate's request for comment..
Tether is the publisher of USDT and is the largest Stablecoin with a market capitalization of over $140 billion.
Garantex punishment
This latest development follows an increase in sanctions against Garantex over allegations that Russia helped bypass financial restrictions in the West.
The US Treasury Department's Office of Foreign Assets Control (OFAC) first approved the exchange in April 2022 as part of an effort to combat illegal financial activities.
Recently, the European Union has also imposed sanctions on Garantex, citing its relationship with Russian banks already under EU restrictions. This was the first time the EU directly authorized a Russian crypto exchange.
Meanwhile, US and UK authorities are also investigating Garantex, which is allegedly spurred more than $20 billion in transactions aimed at avoiding sanctions. Regulators suspect the platform played a role in Russia's efforts to move funds, and could contribute to war-related financial strategies.
