Unmasking Garantex: The Crypto Exchange That Laughs in the Face of Sanctions! 😲💰

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It is with no small measure of astonishment that one observes the European Union’s recent endeavor to target Garantex, the largest crypto exchange in Russia, which has, rather audaciously, managed to thrive under the weight of sanctions for a considerable duration. One might be tempted to inquire whether the exchange possesses some sort of magical charm that renders it impervious to the strictures of international law.

On the rather eventful day of February 24, the European Council, in its infinite wisdom, unveiled its 16th sanctions package, thereby adding Garantex to its illustrious list of entities deemed “closely associated with EU-sanctioned Russian banks.” One cannot help but wonder if this is akin to placing a “Do Not Enter” sign on a door that has long been ajar.

Garantex, it appears, is not merely a crypto exchange but a veritable titan in the realm of Russian finance, operating under the watchful gaze of the Kremlin. With its offices nestled within the opulent Federation Tower in Moscow, it offers the rather convenient service of allowing deposits and withdrawals in cash rubles to various Russian bank cards, including the likes of Sberbank, Tinkoff, and Alfa-Bank. How delightfully convenient for those wishing to engage in a bit of financial mischief!

It is worth noting that the European Council’s sanctions come a full two years after Garantex was blacklisted by the U.S. Treasury’s Office of Foreign Assets Control in 2022. One might ponder the efficacy of such measures when the exchange continues to operate with the aplomb of a seasoned performer on a grand stage.

‘Won’t have a major impact’

Co-founded in the twilight of 2019 by the astute tech expert Stanislav Drugalev and the rather enigmatic Sergey Mendeleev, a former KGB officer, Garantex was initially established in Estonia. It has since been under the watchful eye of authorities for its rather dubious role in facilitating transactions of a less-than-savory nature.

According to the esteemed analysts at Chainalysis, Garantex has been implicated in facilitating payments linked to ransomware gangs and the infamous darknet markets, including the notorious Hydra marketplace, which met its demise in April 2022. It seems that Garantex has quite the clientele, including various criminal organizations and even terror groups such as Hezbollah. One can only imagine the dinner parties they must host!

In a rather candid conversation with crypto.news, Andrew Fierman, the head of national security intelligence at Chainalysis, remarked that Garantex remains operational “years after the U.S. and U.K. sanctioned it.” It appears that the exchange has mastered the art of resilience, much like a weed that refuses to be uprooted.

“The E.U.’s move, while driving more sanctions requirements for E.U. entities, likely won’t have a major impact on Garantex’s overall operations. However, it is symbolic of the E.U.’s efforts to maintain economic pressure on Russian financial services and now, cryptocurrency exchanges.”

Fierman further elucidated that trust plays a “significant role in the Russian cryptocurrency ecosystem.” Despite the latest sanctions, Garantex is likely to remain a “big part as long as it is operational.” How charmingly optimistic!

“Garantex is generally a trusted platform within Russia and has stable liquidity reserves, making it unlikely users would move away from the platform now. As we’ve seen with other exchanges in Russia, like Berebit, which halted withdrawals and offered their customers chocolate instead, users will likely flock to services where their money is most secure.”

Garantex’s reputation is not merely a product of its longevity but is also bolstered by its apparent patronage from the Kremlin. A rather intriguing investigation by Eesti Ekspress and the International Consortium of Investigative Journalists in March 2024 unveiled connections between Garantex affiliates and the Russian government. The report revealed that one of the exchange’s co-founders met with an untimely demise under mysterious circumstances, shortly before another shareholder with ties to Rosneft, the Kremlin-controlled oil behemoth, assumed control of the company’s records. How very convenient!

Richard Sanders, a digital forensics analyst based in the U.S., posited that the Russian government likely has a vested interest in allowing Garantex to flourish.

“The intelligence value that can be obtained by the Russian government far outweighs their desire to prosecute criminals that by and large profit off of what the

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2025-02-25 21:27