Garantex sanctioned by EU as crackdown on Russian financial networks Intensifies
The EU hits 35 entities and 48 individuals across Russia, China, and North Korea with sanctions.
The European Union sanctioned the Russian cryptocurrency exchange Garantex on 24 February as part of ongoing efforts to sever illicit financial flows linked to the war in Ukraine. The measure forms part of a broader sanctions package targeting 35 entities across Russia, China, and North Korea, alongside 48 individuals accused of supporting Moscow’s military operations.
The growing sanctions regime now applies to over 2,400 individuals and entities. Those designated face an asset freeze, and EU citizens and businesses are prohibited from providing them with financial support. Additionally, individuals subject to sanctions are barred from entering or transiting through EU member states.
The EU justified its decision by citing Garantex’s association with major sanctioned Russian banks, including Sberbank, Tinkoff Bank, and Alfa-Bank. The exchange, according to the EU, serves as a conduit for sanctioned banks' clients to access the global financial system, facilitating the conversion of roubles into cryptocurrency and subsequently into other currencies.
Garantex had already drawn scrutiny from Western regulators. The United States and the United Kingdom imposed sanctions on the exchange in April 2022, alongside the notorious Russian dark web marketplace, Hydra. At the time, the U.S. Treasury identified over $100 million in Garantex transactions linked to illicit actors, including $2.6 million directly associated with Hydra.
Founded in 2019, Garantex was initially registered in Estonia but lost its licence to operate there in February 2022. It has since been linked to an address in Federation Tower East, or Vostok, a Moscow high-rise that houses several other sanctioned cryptocurrency exchanges.
Beyond targeting Garantex, the EU has also imposed comprehensive sanctions on three entities involved in transporting Russian crude oil and petroleum products, a crucial revenue source for the Kremlin. The latest measures extend to actors engaged in sanction circumvention, particularly through third-party countries.
A Chinese firm specialising in satellite imagery—allegedly aiding Russia’s war effort in Ukraine—has also been sanctioned, alongside its chairman. Two senior officials from the Korean People’s Army in North Korea likewise face penalties for their role in sending North Korean soldiers to Ukraine.
Further Reading
ICIJ Investigation into Garantex – A 2024 deep dive into Garantex’s connections to criminal networks and state-linked enterprises.
The Tinder Swindler’s failed memecoin – Analysis of how the subject of a 2022 Netflix documentary tried to leverage his notoriety in a memecoin launch.
Kanye West and Cryptocurrency – Kanye West claims to be launching a token and then deleted all his posts about it.