This article will explore Garantex's history of sanctions, platform fund management strategies, and responses to stablecoin freezes, discussing how to avoid on-chain compliance risks and ensure fund security.
Written by: Lisa & Keywolf
On March 6, 2025, Tether froze approximately $28 million worth of USDT belonging to the sanctioned Russian exchange Garantex, once again drawing widespread attention to the risks of stablecoin freezes. This article will explore Garantex's history of sanctions, platform fund management strategies, and responses to stablecoin freezes, discussing how to avoid on-chain compliance risks and ensure fund security.
History of Sanctions
Garantex was established at the end of 2019, initially registered in Estonia, primarily providing fiat-to-cryptocurrency exchange services. Due to changes in the regulatory environment, its main operations quickly shifted to Moscow, with operational points established in the Federal Tower and St. Petersburg, locations that are also home to other sanctioned cryptocurrency exchanges (such as SUEX and CHATEX). Garantex's allowance for anonymous trading and its weak compliance gradually made it an important channel for hackers, ransomware groups, and illegal funds, ultimately leading to intense scrutiny from regulatory agencies.
1. Sanctioned by OFAC and FIU
In February 2022, after an investigation by the Estonian Financial Intelligence Unit (FIU) into Garantex, serious anti-money laundering/anti-terrorist financing (AML/CFT) violations were discovered, along with links to criminal funds, leading to the revocation of Garantex's virtual currency service provider license. Despite losing its Estonian license, Garantex continued to provide services to customers through other means.
On April 6, 2022, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced sanctions against Garantex, accusing the exchange of facilitating illegal transactions, money laundering, and other criminal activities. During this investigation, OFAC found that over $100 million in Garantex transactions involved illegal actors and dark web markets, including nearly $6 million from the Russian ransomware-as-a-service (RaaS) group Conti and nearly $2.6 million from the now-defunct dark web market Hydra. OFAC also added three wallets associated with Garantex to the Specially Designated Nationals and Blocked Persons List (SDN List), prohibiting U.S. individuals or entities from transacting with them. This action was part of the U.S. government's crackdown on the Russian dark web market Hydra. On the same day, German law enforcement shut down Hydra and seized 543 bitcoins (worth approximately $25 million at the time).
(Source: https://ofac.treasury.gov/recent-actions/20220405)
2. Links to Illegal Funds
Even after being sanctioned by the U.S. and Estonia, Garantex continued to operate and maintained links to funds from hackers, ransomware groups, and criminal organizations.
On June 13, 2023, Cointelegraph reported that the North Korean hacker group Lazarus, believed to be behind the Atomic Wallet theft (with losses of up to $35 million), transferred some of the stolen funds to Garantex in exchange for BTC.
On July 25, 2024, TRM Labs released a report stating that in 2023, Garantex accounted for 82% of the international cryptocurrency trading volume involving sanctioned entities, far exceeding other sanctioned platforms.
On February 12, 2025, it was reported that the U.S. Treasury's OFAC, the UK's FCDO, and Australia's DFAT jointly sanctioned the Russian Bulletproof Hosting (BPH) service provider Zservers, accusing it of providing critical infrastructure support to the ransomware group LockBit. On-chain data indicated that Zservers was involved in at least $5.2 million in cryptocurrency transactions, with some funds flowing to Garantex and non-KYC exchanges.
3. Stablecoin Freezes
Notably, Garantex's user base and trading volume did not significantly decline due to the sanctions; in fact, it even saw growth at times. According to data from CoinPaprika, since 2022, Garantex's daily trading volume has surged dramatically, increasing over 1000% in the past three years, from approximately $11 million on March 1, 2022, to $121.6 million on March 1, 2025.
(Source: CoinPaprika)
However, as regulatory scrutiny intensified, the severity of sanctions increased. On March 6, 2025, stablecoin issuer Tether froze approximately $28 million worth of USDT, involving multiple wallets associated with Garantex. Garantex was forced to suspend all trading and withdrawals and issued a notice on its official website warning Russian users that their USDT assets were at risk. This action followed the EU's 16th round of sanctions against Russia announced on February 26, which directly listed Garantex due to its close ties with sanctioned Russian banks.
(Source: https://t.me/misttrackalert)_
Garantex officially responded that it "will continue to fight."
(Source: Garantex Telegram)
How Garantex Manages Its Hot Wallets After Sanctions
According to address label data analysis from SlowMist's anti-money laundering tracking analysis system MistTrack, after being sanctioned by OFAC in April 2022, Garantex implemented a series of measures to maintain operations, with the most critical being the continuous adjustment of the platform's hot wallet fund management strategy. The main historical changes are as follows:
- From April 2022 to December 2022, Garantex changed its hot wallets approximately once per quarter;
- From December 2022 to February 2023, Garantex changed its hot wallets approximately once per week;
- From February 2023 to the present, Garantex changes its hot wallets approximately every two days.
SlowMist's MistTrack has accumulated over 1 million wallet addresses related to Garantex, and its internally developed label data mining system continuously performs feature recognition and address tagging on Garantex's frequently changing hot wallet addresses. Some statistical analyses of hot wallet addresses are shown below:
Further analysis of the counterparty addresses of Garantex's hot wallet addresses reveals that Garantex's users not only withdraw USDT to non-custodial wallets (such as Ledger, MetaMask) but also have a large number of users withdrawing directly to other exchanges, as shown in the following chart (sample data, may not fully correspond to actual facts, for reference only):
How to Respond to Stablecoin Freezes
According to data statistics from MistTrack, in 2024, Tether froze USDT amounting to $540,195,442, while Circle froze USDC amounting to $13,359,597. For exchanges, institutions, and individuals, reducing the risk of stablecoin freezes and ensuring fund security within a compliance framework is a significant challenge currently faced.
(Source: https://dune.com/misttrack/2024)
Regulatory agencies and stablecoin issuers primarily rely on on-chain data analysis tools to identify and track wallets suspected of illegal activities. If a trading address is linked to sanctioned entities or illicit funds, even incidental contact may lead to account funds being frozen. KYT (Know Your Transaction) can analyze transaction behavior in real-time and identify suspicious fund flows, thereby reducing the risk of fund freezes due to operational errors or compliance issues.
Based on years of blockchain security research and risk control practices, SlowMist's anti-money laundering tracking analysis system MistTrack has provided stable and reliable on-chain risk control support and strong AML compliance solutions for multiple exchanges and enterprises. It also offers accurate data analysis, real-time risk monitoring, and comprehensive compliance support for individual users, corporate teams, and developers. MistTrack can detect the source of funds, screening whether the funds come from sanctioned wallets or high-risk addresses, thus avoiding the acceptance of tainted funds. It can also perform real-time risk control by conducting address reviews before transactions, preventing interactions with sanctioned addresses or suspicious funds, thereby reducing the likelihood of freezes. MistTrack currently covers 17 public chains, including: Bitcoin, Ethereum, BNB Smart Chain, TRON, Polygon, IoTeX, Avalanche-C, Arbitrum One, OP Mainnet, Base, zkSync Era, Merlin Chain, Toncoin, Litecoin, Dogecoin, Bitcoin Cash, and Solana.
From the sanctions against Garantex in 2022 to Tether freezing USDT in 2025, we can see the long-term impact of compliance risks on exchanges, institutions, and individuals. As the regulatory environment tightens, KYT has become an indispensable compliance tool in the crypto industry. If needed, please contact us for a customized KYT solution to ensure the security of fund flows, avoid asset freezes, and continue to develop within a legal and compliant framework!
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
