Stablecoin issuer Tether has frozen $27 million in USDT held by the Russian crypto exchange Garantex, forcing the platform to suspend all services. The move comes after the European Union sanctioned Garantex on February 26 as part of its latest measures against Russia.
“Tether has entered the war against the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles [$27 million],” Garantex announced on its Telegram channel on March 6.
The exchange has since put its website under maintenance and halted all withdrawals.
EU and US Sanctions Target Russian Crypto Sector
Garantex was added to the EU’s sanctions list as part of its 16th package aimed at restricting Russian financial activity. The European Council stated that this was the first time it had sanctioned a Russian-based cryptocurrency exchange, citing its links to already-sanctioned Russian banks.
The U.S. had taken action against Garantex earlier, with the Treasury Department’s Office of Foreign Assets Control (OFAC) imposing sanctions on the exchange in April 2022.
According to OFAC, Garantex was originally registered in Estonia in 2019 but conducted most of its operations in Moscow and Saint Petersburg, where other sanctioned crypto platforms have also operated.
Following Tether’s decision, Garantex warned users that USDT holdings in Russia could face similar risks.
“We will fight, and we will not give up,” the exchange declared.
Russian lawmaker Anton Gorelkin, deputy head of the parliament’s information policy committee, suggested the incident was just the beginning of Western pressure on the country’s crypto industry. However, he downplayed the broader impact, stating that completely blocking Russia from crypto markets is “impossible.”
Garantex’s Trading Volume Has Surged Despite Sanctions
While Garantex is not listed on major crypto data platforms like CoinGecko or CoinMarketCap, data from CoinPaprika suggests its daily trading volume has soared over 1,000% since 2022. The exchange reportedly processed $11 million in daily trades on March 1, 2022, but that number ballooned to $121.6 million by March 1, 2025.
Even with this growth, Garantex remains far smaller than global giants like Binance, which handles around $23 billion in daily trading volume.
Sergey Mendeleev, who founded Garantex but claims to have left the exchange in 2020, pointed to the USDT freeze as a lesson in self-custody.
“I can only hope that this story will make people understand: ‘Not your keys, not your money,’” he said, emphasising the risks of holding assets on centralised exchanges.
With mounting regulatory pressure, Russian crypto users may increasingly turn to decentralised alternatives to safeguard their assets.
