Tether Freezes $27M USDT: Shutting Down Garantex—Russia’s Biggest Sanctioned Crypto Exchange!

Sanctioned crypto exchange Garantex has shut down all operations after Tether freezes USDT, nearly 2.5 billion rubles. The move comes amid increasing pressure from U.S. and European regulators, who have long accused Garantex of facilitating illicit transactions linked to Russian financial networks. Garantex, which has continued to operate despite past sanctions, announced the suspension on its Telegram channel, blaming Tether for waging “war against the Russian crypto market.”

Tether’s Move Sparks Reactions in the Crypto World

Tether’s sudden action against Garantex has triggered strong reactions. In a March 6 Telegram post, Garantex declared that Tether had blocked its wallets, causing a halt in all trading and withdrawals. “We are fighting and will not give up!” the exchange stated, warning users that all USDT holdings in Russian wallets are now at risk.

Garantex halts operations after Tether freezes $27M $USDT

Russian crypto exchange Garantex suspended all trading and withdrawals after Tether froze $27 million in USDT linked to the platform, according to Cointelegraph. The freeze followed new EU sanctions targeting Garantex for…

— CoinNess Global (@CoinnessGL) March 6, 2025

A widely circulated tweet by CoinNess Global on March 6, 2025, reported the suspension: “Garantex halts operations after Tether freezes $27M USDT.” The decision has raised fear in the Russian cryptocurrency community, as users are deploring the use of centralized stablecoins. Traders fear that the sanctioned cryptocurrency exchange platforms will face more limitations and that it will be more difficult to gain liquidity.

Why is Garantex targeted? A History of Sanctions

Garantex has been low since April 2022, when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the exchange. The sanctions were based on claims that Garantex handled illegal transactions associated with ransomware gangs, darknet markets, and Russian financial networks. Reports indicate that the exchange handled payments related to the defunct Hydra marketplace and the notorious Conti ransomware gang.

The recent crackdown comes after the European Union added Garantex to its 16th package of sanctions against Russia, which targets financial networks funding Moscow. Despite these restrictions, Garantex continued operations using sanctioned Russian banks. However, Tether’s freeze on its wallets has now forced the exchange into a temporary shutdown.

Garantex’s capacity to function under prior sanctions has given regulators concern that there are enforcement loopholes. Sanctioned crypto exchange websites assist in evading financial limits, making it more difficult to follow illegal transactions connected with cybercrime and money laundering. The move marks a harder crackdown on Russia’s exposure to international crypto markets.

Impact on Russian Crypto Users and Market

The freezing of USDT funds has left many Russian traders and investors in uncertainty. As Tether freezes USDT, users holding USDT in Garantex wallets face potential losses. The suspension of the exchange has also affected trading activity and raised questions about the future of crypto exchanges in Russia.

Some experts think that this action may drive Russian crypto traders to other stablecoins or decentralized exchanges (DEXs) to circumvent restrictions. But with mounting global regulatory pressure, the ways for evading sanctions are narrowing. The effect of this freeze goes beyond Garantex, as it indicates that large stablecoin issuers are now more actively enforcing international sanctions.

Future of Garantex and Russian Crypto Regulations

As Tether freezes USDT, Garantex’s future remains uncertain. The exchange is exploring ways to restore operations, but experts believe that bypassing such restrictions will be difficult. Meanwhile, Russian authorities might respond by pushing for alternative stablecoins to avoid reliance on USDT.

This event is a growing gap between Russia’s sanctioned crypto exchange networks and Western regulators. While some traders may shift to decentralized finance (DeFi) platforms, the general impact of illicit transactions linked with these exchanges is a major worry for global regulators.