Sanctioned Russian Crypto Exchange Garantex Reappears Under New Name Amid Allegations of Money Laundering

Garantex, a Russian cryptocurrency exchange previously sanctioned by the U.S. government, is reportedly re-emerging under a new name, Grinex, after allegedly laundering millions of dollars through ruble-backed stablecoins. This move follows a series of significant legal and financial setbacks for the platform, which included the freezing of $27 million in Tether and the arrest of its operator in India.

According to a report released on March 19 by Swiss blockchain analytics firm Global Ledger, the operators of Garantex have been shifting liquidity and customer deposits to Grinex, which is described as “Garantex’s full-fledged successor.” The company’s investigation uncovered on-chain evidence linking the two platforms.

Global Ledger stated, "We can confidently state that Grinex and Garantex are directly connected both onchain and offchain." The report highlights the transfer of A7A5 liquidity, the use of one-time-use wallets, and the involvement of addresses associated with Garantex as clear indicators of the two platforms’ connection.

In its investigation, Global Ledger uncovered evidence that Garantex laundered over $60 million worth of ruble-backed stablecoins (A7A5) and sent the funds to Grinex. According to the analysts, the process involved burning and subsequently minting new coins from a system address with a clean history, effectively “laundering” the funds.

The report also noted that a Garantex manager confirmed that customers have been visiting the exchange’s office in person to transfer funds from Garantex to Grinex. Off-chain indicators, including transactional patterns and other exchange behaviors, further supported the claim that the two platforms are directly linked.

Global Ledger also referenced information from the Russian crypto tracking site CoinMarketRating, which describes Grinex as being founded by the same individuals behind Garantex. The site’s description of Grinex further reinforces the claim that the new exchange is not an independent entity but rather a continuation of Garantex’s financial operations, despite the official shutdown of the original platform.

As of March 14, Grinex was seeing significant trading activity, with incoming transactions on the platform totaling nearly $30 million. By mid-March, CoinMarketRating reported that Grinex had accumulated over $68 million in monthly trading volume, with spot trading exceeding $2 million.

Garantex’s troubles began in April 2022 when the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the platform for alleged involvement in money laundering. On March 6, 2023, the U.S. Department of Justice, working in coordination with authorities in Germany and Finland, took further action by freezing domains associated with Garantex. Authorities allege that the exchange processed over $96 billion in illicit funds since its launch in 2019.

In response to the sanctions, stablecoin operator Tether froze $27 million in USDT (Tether) linked to Garantex on March 6, forcing the exchange to halt all operations, including withdrawals. This freezing of assets marked a significant blow to Garantex, further isolating the platform from its user base and prompting the shift to Grinex.

The situation escalated further on March 12 when Aleksej Bešciokov, the alleged operator of Garantex, was arrested in India by officials from the Central Bureau of Investigation (CBI). Bešciokov faces U.S. charges, including conspiracy to commit money laundering. His arrest underscores the increasing international pressure on Garantex’s operations and its alleged role in illicit financial activities.

As the operators of Garantex pivot to Grinex, the continued scrutiny from global regulators and law enforcement agencies indicates that the new platform could face similar challenges in the near future. The shifting of funds and activities between these platforms suggests a well-organized effort to evade detection while continuing to operate in the cryptocurrency space.