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Russian Crypto Exchange Garantex Faces Major Setbacks Amid Law Enforcement Action

It’s been a rough week for the Russian cryptocurrency exchange Garantex. The company saw its wallets holding $28 million in funds blocked by stablecoin issuer Tether. On the same day, a law enforcement operation led by the U.S. Secret Service resulted in the seizure of Garantex’s official websites, causing the company to suspend all services, including cryptocurrency withdrawals.

The situation escalated on Friday when the U.S. Justice Department charged two of Garantex’s administrators, Aleksej Besciokov and Aleksandr Mira Serda, accusing them of enabling money laundering for cybercriminals and terrorists. The U.S. prosecutors also froze over $26 million in Tether and Bitcoin associated with the exchange, explaining the blocking of Garantex’s wallets.

In response, Garantex published an announcement on its official Telegram channel offering a potential solution for its customers’ blocked assets. The company is inviting users with a positive account balance to attend face-to-face meetings at its Moscow office, a move that raises concerns due to the high risks involved, including potential exposure to the Russian government and the international sanctions on the company.

While the exact number of Garantex’s customers remains unclear, the exchange has processed more than $96 billion in cryptocurrency transactions since 2019, suggesting a significant user base. However, the company’s ability to refund customers is uncertain given its current legal and operational troubles.

As of now, Garantex has not responded to any requests for comment on the situation.