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Sanctioned Russian Crypto Exchange Garantex Suspends Services After Tether Blocks Wallets

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Russian cryptocurrency exchange Garantex announced on Thursday that stablecoin Tether had blocked digital wallets on its platform, which collectively held over 2.5 billion roubles ($28 million). This move has forced Garantex to suspend operations just days after being sanctioned by the European Union.

The EU included Garantex in its 16th sanctions package on February 24, accusing the platform of being closely linked to Russian banks already under EU sanctions and playing a role in circumventing these sanctions. In a statement on Telegram, Garantex expressed frustration, stating, “We have bad news. Tether has entered the war against the Russian crypto market.”

When contacted for comment, a spokesperson for Tether referred Reuters to the U.S. Secret Service, offering no additional details on the matter.

Garantex confirmed it was halting all services, including cryptocurrency withdrawals, and vowed to continue fighting against the sanctions. “Please note that all USDT held in Russian wallets is now under threat,” the exchange warned.

As access to the U.S. dollar and the SWIFT global payment network has been restricted, many Russians have turned to cryptocurrencies to bypass these financial limitations, with the central bank permitting businesses to use cryptocurrencies for international trade.

The U.S. had previously labeled Garantex as a “ransomware-enabling virtual currency exchange” when imposing sanctions on the platform in April 2022, accusing it of facilitating illicit activities.

Russian lawmaker Anton Gorelkin responded to the latest sanctions, accusing Western nations of pursuing political motives. He assured that this would not be the last attempt to target Russia’s cryptocurrency infrastructure but stressed that cryptocurrencies remain a key tool for circumventing sanctions, despite Tether’s actions.

Tether Announces Plans to Move Headquarters to Crypto-Friendly El Salvador

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Tether, the company behind the USDT stablecoin, has made a significant move by deciding to relocate its headquarters from the British Virgin Islands to El Salvador. This shift comes after the company secured a virtual asset service provider (VASP) license in the Central American nation, marking a milestone in its expansion plans. Tether’s decision to establish its operations in El Salvador aligns with the company’s broader vision to advance the mainstream adoption of blockchain technology and digital assets, tapping into the country’s crypto-friendly regulatory environment.

El Salvador made global headlines in 2021 by becoming the first country to officially legalize Bitcoin, designating it as legal tender alongside the US dollar. Tether has consistently supported Bitcoin in its business operations, and this move further solidifies the company’s commitment to the cryptocurrency ecosystem. In 2023, Tether revealed plans to allocate up to 15 percent of its net profits to purchase Bitcoin tokens, signaling a growing investment in the leading cryptocurrency. The company’s long-term plans include enhancing the integration of stablecoins and Bitcoin into the global financial system, a vision it intends to push forward by establishing its headquarters in El Salvador.

Tether’s decision to relocate is also backed by its impressive financial performance. The company reported a net profit of $10 billion in 2024, with experts predicting continued growth in the pro-crypto landscape. Tether sees El Salvador’s regulatory environment as an ideal backdrop to foster its ambitions, as the country’s government has actively supported the crypto industry. This move also positions Tether to benefit from the country’s innovative approach to financial technology, which has already attracted various blockchain-related ventures.

Paolo Ardoino, CEO of Tether, expressed his enthusiasm about the move, emphasizing that it aligns with the company’s values of financial freedom, innovation, and resilience. By setting up operations in El Salvador, Tether not only strengthens its presence in the region but also reinforces its dedication to promoting the growth and adoption of digital assets. As El Salvador continues to embrace cryptocurrencies, Tether’s decision marks a significant step in furthering the country’s status as a global hub for blockchain and cryptocurrency innovation.

Tether Plans Move to El Salvador to Capitalize on Country’s Crypto Hub Aspirations

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Tether, the world’s largest stablecoin issuer, has announced plans to relocate its headquarters to El Salvador. The company’s CEO, Paolo Ardoino, confirmed the move, noting that both Tether’s founders and senior management will also make the shift to the Central American country. This decision follows the company’s recent acquisition of a license to operate as a digital asset service provider in El Salvador. Tether, previously incorporated in the British Virgin Islands, will now establish a physical presence in El Salvador, marking a significant milestone in its operations. However, Ardoino clarified that only a portion of the company’s 100-plus employees would relocate, as many work remotely.

El Salvador, which has made headlines for adopting Bitcoin as legal tender, is positioning itself as a hub for cryptocurrency trading. The government is actively promoting digital asset innovation, and President Nayib Bukele welcomed Tether’s move, symbolizing it as a step toward solidifying the country’s place in the crypto world.

Tether, which is a cornerstone of the stablecoin market, has raised concerns among regulators due to the growing size of its reserves, which bridge the gap between traditional finance and the cryptocurrency world. The company has faced scrutiny over the transparency of its reserve backing, though it asserts that the majority of its stablecoin is supported by traditional currency reserves held at Cantor Fitzgerald. Tether’s move to El Salvador follows its commitment to increasing the monitoring of its tokens to prevent illicit finance activities.

In the broader context, while Tether is expanding its operations in El Salvador, it has ruled out the United States as a headquarters location for now, citing regulatory uncertainties. Ardoino also acknowledged the importance of international collaboration but emphasized that, for the time being, El Salvador offers an appealing regulatory framework.

With Tether’s token (USDT) accounting for two-thirds of the $212 billion stablecoin market, the company’s move to El Salvador could significantly bolster the country’s role in the global cryptocurrency ecosystem.