Expert Analyzes Impact of Garantex Wallet Blockade

The situation surrounding the blockade of wallets of the Russian exchange Garantex by Tether is multifaceted, involving international sanctions and anti-money laundering efforts. This was explained to ForkLog by Fyodor Ivanov, Director of Analytics at Shard.

Ivanov noted that American regulators accused Garantex of laundering money for the darknet marketplace Hydra and hacker groups back in April 2022. At that time, the U.S. Treasury added the platform to its sanctions list.

The involvement of law enforcement agencies from countries like Finland, Estonia, Germany, and the Netherlands indicates active efforts not only to counteract the circumvention of anti-Russian sanctions but also to combat financial crimes, including drug trafficking, according to the analyst.

The future scenario for the Russian crypto market remains uncertain. On one hand, the lack of regulation makes the entire industry vulnerable, leaving exchange clients fully exposed to such crises.

Garantex’s losses, estimated at over 2 billion rubles, could affect both the company’s financial standing and user trust. Ivanov believes this should signal to Russian authorities the urgent need to formalize and regulate the crypto sphere.

For instance, integrating Russian crypto exchanges into a regulated financial system could make their operations more transparent and stable. Despite some progress by the Bank of Russia regarding cryptocurrencies, current measures are insufficient for full legalization of the industry, the expert emphasized.

For Russian users, this incident heightens the risks associated with using assets that have passed through problematic platforms. The expert reminds that even if Garantex resumes operations, cryptocurrency linked to this exchange will remain “high-risk.”

“In this case, it must be understood that cryptocurrency passing through Garantex wallets always carries the risk of being blocked. Moreover, it is more likely that this will be done not by the issuer, but by an exchange or exchanger,” Ivanov stated.

While this situation primarily affects coins like USDT and USDC, similar risks apply to Bitcoin, Ivanov believes. The potential impact on cross-border transactions underscores the importance of this incident not only for private users but also for businesses using exchanges for foreign economic activities.

Regarding further blockades, the expert believes it is currently impossible to draw definitive conclusions without official statements from U.S. authorities. However, if the issue concerns a sanctions policy aimed at limiting circumvention schemes, the risk to other platforms cannot be ruled out.

“The best protection against this is an open competitive market, represented by many players who operate in accordance with international standards. But we are not even talking about this yet,” Ivanov emphasized.

On February 24, the EU included Garantex in its 16th package of sanctions against Russia for aiding in the circumvention of restrictions.