Sanctioned Russian Crypto Exchange Garantex Seized, Operators Charged With Money Laundering

Garantex, a notorious Russian crypto exchange, has been dismantled in a significant international law enforcement operation, as announced by the U.S. Department of Justice (DOJ) on Friday. The operation, which occurred on Thursday, involved a coalition of law enforcement agencies from the U.S., Germany, and Finland, leading to the seizure of Garantex’s domains and servers, alongside the freezing of nearly $28 million in cryptocurrency linked to the exchange, facilitated by Tether, a prominent stablecoin issuer.

The exchange had come under scrutiny since the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Garantex in 2022. The sanctions targeted its alleged role in facilitating money laundering activities for high-profile ransomware groups, including Conti and Black Basta, as well as supporting illegal operations linked to darknet markets like Hydra. Hydra was previously recognized as the largest darknet marketplace globally until its closure in 2022.

Despite these sanctions, Garantex continued operating with apparent impunity, processing over $60 billion in cryptocurrency transactions post-sanction, amounting to a staggering total of over $96 billion in transacted assets since its inception. This persistence in illicit activity can be attributed to the exchange’s lack of basic customer verification practices. According to court documents, Garantex did not employ adequate know-your-customer (KYC) procedures, enabling users to open accounts with pseudonymous or blatantly criminal names like “Drug,” “hacker,” and “God,” effectively removing barriers for illicit actors.

Garantex’s clientele largely comprised cybercriminals and organized crime, including the North Korean hacking collective known as the Lazarus Group. This group attracted attention for its alleged involvement in the recent $1.5 billion Bybit heist. Furthermore, Russian oligarchs allegedly utilized the exchange to bypass international sanctions related to the ongoing conflict in Ukraine, with sophisticated evasion tactics linked to Garantex being employed by entities like the TGR Group.

In the aftermath of this extensive operation, two of Garantex’s operators were charged in the U.S. with serious offenses. Aleksej Besciokov, a 46-year-old Lithuanian national residing in Russia, faces multiple charges including money laundering conspiracy and operating an unlicensed money transmitting business. His counterpart, Aleksandr Mira Serda, a 40-year-old Russian citizen currently based in the United Arab Emirates, has similarly been charged with conspiracy to commit money laundering.

The dismantling of Garantex is part of a broader effort by international authorities to crack down on the rising tide of cryptocurrency-related crime, particularly as criminal organizations increasingly exploit these platforms to facilitate their operations undetected.