Garantex Administrator Arrested in India

Garantex Co-Founder Apprehended in India

The co-founder of Garantex, a Russian cryptocurrency exchange subject to sanctions from both the European Union and the U.S. government, has been taken into custody by Indian police. This action was carried out under India’s extradition laws, as confirmed by state authorities and exclusively reported by TechCrunch.

Details of the Arrest

Aleksej Besciokov, a Lithuanian citizen, was arrested at 4 p.m. local time on Tuesday in Varkala, a coastal municipality in the state of Kerala. This information was provided by the state police official who executed the arrest.

The arrest warrant for Besciokov was issued by the Patiala House Court located in New Delhi, according to the police official.

U.S. Department of Justice Accusations

Just last week, the U.S. Department of Justice formally accused Besciokov of authorizing transactions on Garantex that were connected to hackers affiliated with the North Korean government, as well as other individuals involved in cybercrime. He now faces criminal charges related to facilitating money laundering through the cryptocurrency exchange.

Confirmation from Government Officials

Indian government officials subsequently confirmed Besciokov’s arrest in a statement released on Wednesday. The statement detailed that Indian police acted on an arrest warrant requested by the U.S. government, acting on intelligence suggesting Besciokov was preparing to leave India.

Nicole Oxman, a spokesperson for the U.S. Justice Department, confirmed in a statement to TechCrunch that Besciokov was arrested “at the request of the United States,” but declined to provide any further commentary.

Next Steps in the Legal Process

Following his arrest, Besciokov was presented before a local court. He is scheduled to be transferred to the Patiala Court on Monday to address the charges brought against him, as stated by the police official.

KrebsonSecurity initially reported on Besciokov’s arrest on Tuesday. Garantex has not yet responded to requests for comment from TechCrunch regarding the situation.

Co-Founder and Allegations of Sanctions Evasion

Besciokov was indicted alongside Aleksandr Mira Serda, a Russian national and fellow co-founder of Garantex, who currently resides in the United Arab Emirates.

U.S. prosecutors allege that the two administrators actively “redesigned Garantex’s operations to evade and violate U.S. sanctions and induce U.S. businesses to unwittingly transact with Garantex in violation of the sanctions.”

Actions Taken by U.S. Authorities

The U.S. Secret Service seized Garantex’s websites after the Justice Department revealed its indictment against Besciokov and Serda. Furthermore, U.S. authorities have frozen over $26 million in cryptocurrency assets.

Garantex's Response and Suspension of Operations

In the wake of these actions, Garantex has suspended its operations. The exchange has invited its customers to “face-to-face meetings” at its Moscow office, indicating an attempt to address the issue of “blocked assets” with an unspecified solution.

Garantex released a press statement to TechCrunch on Tuesday, asserting its commitment to fulfilling its obligations to users. The company intends to fully compensate users for blocked assets using existing assets located within the Russian Federation, following a process similar to financial rehabilitation procedures.

The press release further stated that Garantex’s activities will cease upon completion of the rehabilitation process, with the exception of its compliance department.

This article has been updated to include statements from the Indian government and the U.S. Department of Justice confirming Besciokov’s arrest in India.