By Elena Fabrichnaya and Alexander Marrow
MOSCOW (Reuters) – Russian cryptocurrency exchange Garantex on Thursday said stablecoin Tether had blocked digital wallets on its platform holding more than 2.5 billion roubles ($28 million), forcing it to suspend operations days after coming under EU sanctions.
The European Union included Garantex in its 16th sanctions package against Russia over the conflict in Ukraine on February 24, accusing the crypto exchange of being closely associated with EU-sanctioned Russian banks and responsible for circumventing EU sanctions.
“We have bad news,” Garantex said on Telegram. “Tether has entered the war against the Russian crypto market.”
Tether did not immediately respond to a request for comment.
Garantex said it was temporarily suspending the provision of all services, including cryptocurrency withdrawals.
“We are fighting and will not give up,” Garantex said. “Please note that all USDT held in Russian wallets is now under threat.”
Deprived of access to the U.S. dollar and cut off from the SWIFT global payments network, some Russians have turned to cryptocurrencies to move money overseas and the central bank has allowed businesses to use cryptocurrencies in global trade.
The United States called Garantex a “ransomware-enabling virtual currency exchange” when sanctioning the company in April 2022, accusing it of allowing its systems to be abused by illicit actors.
Russian lawmaker Anton Gorelkin accused Western countries of pursuing political goals and said it would not be the last time pressure is exerted on Russia’s cryptocurrency infrastructure.
“To the investors who underestimated this risk, my condolences,” Gorelkin wrote on Telegram on Thursday.
“But it is worth recognising that it is impossible to completely block this market for Russia,” he said. “Cryptocurrencies will remain one of the most effective tools for circumventing sanctions, although USDT can be safely deleted from this list.”
($1 = 89.2500 roubles)
(Reporting by Elena Fabrichnaya in Moscow and Alexander Marrow in London; Editing by Bernadette Baum)
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