US Treasury’s OFAC sanctions crypto exchange Garantex for second time

The US Treasury’s Office of Foreign Assets Control (OFAC) has redesignated cryptocurrency exchange Garantex Europe to its list of sanctioned entities.

In a Thursday notice, OFAC said it had redesignated Garantex as well as sanctioned its “successor,” Grinex, three Garantex executives and six Russia- and Kyrgyz Republic-based companies for allegedly facilitating illicit transactions. According to the government agency, the Garantex exchange processed more than $100 million tied to illicit activities since 2019.

“Digital assets play a crucial role in global innovation and economic development, and the United States will not tolerate abuse of this industry to support cybercrime and sanctions evasion,” said John Hurley, under secretary of the Treasury for terrorism and financial intelligence.

“Exploiting cryptocurrency exchanges to launder money and facilitate ransomware attacks not only threatens our national security, but also tarnishes the reputations of legitimate virtual asset service providers.”

OFAC initially sanctioned Garantex in 2022, saying the exchange had “willfully disregard[ed]” Anti-Money Laundering and Combating the Financing of Terrorism requirements. According to the office, Garantex officers created Grinex as a way to bypass measures taken against the exchange, which included confiscating $26 million in crypto, seizing its website, and indicting two executives

The sanctions included several wallet addresses for Bitcoin (BTC), Ether (ETH) and Tron (TRX).

Related: US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules

Garantex founder arrested in India

The US Department of Justice unsealed indictments against Garantex executives Aleksandr Mira Serda and Aleksej Besciokov in March, leading to the arrest of the latter while he was on holiday in India. He faces charges for conspiracy to commit money laundering, conspiracy to violate US sanctions and conspiracy to operate an unlicensed money services business.

On Aug. 6, the US District Court for the Eastern District of Virginia ordered that a “corrected” warrant be issued for Mira Serda’s arrest. He remained at large at the time of publication, while US authorities offered up to $6 million in rewards for information leading to his arrest or the arrest of other Garantex executives.

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