Tether Flexes Its Power: $27M USDT Frozen on Sanctioned Russian Exchange

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Tether has frozen $27 million in USDT on the sanctioned Russian crypto exchange Garantex, leading the platform to halt its operations.

Tether’s Move Forces Garantex to Cease Operations

On March 6, Garantex announced on its official Telegram channel, “Tether has entered the war against the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles [$27 million].” As a result, the exchange has suspended all services, including withdrawals, while its website remains under maintenance.

Also read: Tether Strengthens Global Reach with Guinea Blockchain Partnership

The European Union sanctioned Garantex on Feb. 26 as part of its 16th package of measures against Russia. This marks the first time the EU has targeted a Russian-based cryptocurrency exchange, citing its close connections to previously sanctioned Russian banks.

Russian USDT Holdings Under Threat

Garantex warned its users that “all USDT in Russian wallets is currently under threat.” Despite the asset freeze, the exchange declared, “We will fight, and we will not give up.”

Regulatory scrutiny of Garantex is not new. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the exchange in April 2022, citing concerns over illicit financial activity. However, the latest EU measures appear to have escalated the situation, prompting Tether to take direct action.

Also read: Tether Reports Record $13 Billion Profits in 2024 Amid Growing US Treasury Holdings

Impact on the Global Crypto Market

The freeze has sparked concerns over the reliability of USDT in Russian wallets and the increasing role of stablecoin issuers in enforcing international sanctions. Experts suggest that such actions could further isolate the Russian cryptocurrency sector, pushing users towards decentralized or less-regulated platforms.

Some analysts predict that Russian traders may seek alternative stablecoins or digital assets with fewer compliance requirements. Additionally, the move raises questions about the broader impact of regulatory crackdowns on cryptocurrency exchanges operating in sanctioned regions.

Also read: Tether Sues Swan Bitcoin Over Alleged Breaches in Joint Bitcoin Mining Venture

With Garantex’s operations halted, the exchange faces a significant challenge in regaining user trust and resuming services. The broader crypto community is now closely watching whether similar sanctions could affect other exchanges linked to restricted entities. This uncertainty has fueled concerns about the accessibility of financial markets for sanctioned firms through digital assets.

Author

Steven Walgenbach

Steven's passion for cryptocurrency and blockchain technology began in 2014, inspiring him to immerse himself in the field. He notably secured a top 5 world ranking in robotics. While he initially pursued a computer science degree at the University of Texas at Arlington, he chose to pause his studies after two semesters to take a more hands-on approach in advancing cryptocurrency technology. During this period, he actively worked on multiple patents related to cryptocurrency and blockchain. Additionally, Steven has explored various areas of the financial sector, including banking and financial markets, developing prototypes such as fully autonomous trading bots and intuitive interfaces that streamline blockchain integration, among other innovations.

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