U.S. Sanctions Target Crypto Wallets Linked to Garantex and Yemen’s Houthis

In a significant move to curb illicit financial flows, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has imposed sanctions on eight cryptocurrency wallet addresses tied to the Russian-based Garantex exchange and Yemen’s Houthi movement. Blockchain forensic firms Chainalysis and TRM Labs traced nearly $1 billion in transactions through these wallets, revealing their role in funding Houthi operations in Yemen and the Red Sea region. The sanctioned addresses include two deposit accounts at major crypto platforms and six privately controlled wallets.

The Houthis: A Growing Threat

The Houthis, formally known as Ansar Allah, are a Zaidi Shia political and military faction that has risen to prominence in Yemen’s protracted conflict. Initially a revivalist group, the Houthis have evolved into a formidable force, launching missile and drone attacks on military and civilian ships in the Red Sea in recent years. In January, then-U.S. President Donald Trump designated the group a foreign terrorist organization, citing their actions as a threat to American civilians, regional allies, and global maritime trade. The U.S. has since conducted bombing campaigns targeting Houthi positions.

The Treasury Department emphasized that the Houthis’ activities undermine security in the Middle East and destabilize international shipping lanes, a concern amplified by their apparent use of cryptocurrency to finance operations.

Garantex: Russia’s Crypto Laundromat

Garantex, a Russian cryptocurrency exchange, has long been under scrutiny for facilitating money laundering. The platform was first sanctioned and shuttered in early March after evidence emerged of its role in illicit financial activities.

Tether, the operator of the leading stablecoin USDt, froze $27 million on the exchange at the time, effectively crippling its operations. However, Garantex has since attempted a rebrand under the name “Grinex,” reportedly moving millions of dollars in the process.

Visualization of transaction flow related to OFAC sanctions. Source: Chainalysis

The exchange’s troubles deepened in mid-March when India’s Central Bureau of Investigation arrested Lithuanian national Aleksej Bešciokov, alleged to be Garantex’s operator. The arrest followed U.S. charges accusing Bešciokov of conspiracy to commit money laundering, operating an unlicensed money-transmitting business, and violating the International Emergency Economic Powers Act.

Crypto’s Role in Geopolitical Conflict

Slava Demchuk, a cryptocurrency expert and consultant to the United Nations Office on Drugs and Crime, told Cointelegraph that these sanctions signal a pivotal shift in how crypto is viewed in global security. “The inclusion of Houthi-linked wallets reflects a broader recognition of crypto’s role in geopolitical conflicts and terrorism financing,” he said. Demchuk warned that the fallout could reshape the regulatory landscape, with compliance frameworks needing rapid adaptation, intensified attribution efforts, and heightened scrutiny of decentralized platforms.

A New Era of Oversight

The sanctions underscore the growing intersection of cryptocurrency and international security. With nearly $1 billion in funds linked to sanctioned entities flowing through these wallets—primarily to support Houthi operations—the U.S. is sending a clear message: digital assets are no longer a fringe concern but a critical focus on national and global stability. As regulators and blockchain analysts intensify their efforts, the crypto industry faces an uncertain future where innovation must coexist with accountability.