Garantex Meeting in Moscow After Takedown Operation

Recent Challenges for Garantex Crypto Exchange

The past week has presented significant difficulties for the Russian cryptocurrency exchange, Garantex.

Funds Blocked and Websites Seized

Initially, on Thursday, Tether, the stablecoin issuer, restricted access to Garantex’s wallets, impacting approximately $28 million in exchange funds. Simultaneously, a coordinated international law enforcement operation, spearheaded by the U.S. Secret Service, resulted in the seizure of Garantex’s official websites.

Notably, Garantex did not publicly address this operation on its Telegram channels. Instead, the company announced a suspension of all services, including cryptocurrency withdrawals.

Criminal Charges and Asset Freezes

Subsequently, on Friday, the U.S. Justice Department filed charges against two Garantex administrators: Aleksej Besciokov and Aleksandr Mira Serda. They are accused of enabling money laundering activities through the platform, benefiting cybercriminals and terrorist organizations.

U.S. prosecutors also revealed the freezing of over $26 million in Tether and Bitcoin used in these illicit transactions, clarifying the earlier Tether wallet restrictions.

A Potential Solution with Conditions

As of Saturday, Garantex proposed a possible resolution for its customers, albeit with a notable condition.

Without referencing the law enforcement actions, Garantex announced via its Telegram channel the development of a “solution for blocked assets.” The exchange invited customers with positive account balances to a personal meeting at its Moscow office, as translated from the original announcement.

In-Person Meetings Required

Garantex stated that “face-to-face meetings” would commence on Monday. Customers were requested to bring the phone associated with their account and have email access, as confirmation codes may be required.

Risks and Concerns

This request is atypical, particularly within the crypto sphere where anonymity is often prioritized. Visiting the offices of a company sanctioned by both the U.S. and European Union governments carries unpredictable risks for customers.

Furthermore, potential risks stemming from the Russian government itself exist, and there is no assurance Garantex can successfully reimburse its customers.

Exchange Transaction Volume and Customer Base

The exact number of Garantex customers remains unknown. However, the Department of Justice reports the exchange has processed over $96 billion in cryptocurrency transactions since 2019.

Given this volume, Garantex likely serves a substantial customer base, many of whom may not reside near Moscow.