Tether, the issuer of the USDT stablecoin, has frozen $27 million in funds belonging to the Russian crypto exchange Garantex . While no official reason has been given, experts believe the move is linked to sanction pressures. Users of the platform are currently unable to withdraw their funds.
Garantex Loses Access to USDT
Russian exchange Garantex announced that Tether had frozen its assets worth approximately $27 million. The platform has now been forced to halt all operations, including withdrawals for its users.
In an official statement, Garantex called the freeze a "war against the Russian crypto market" and warned that other exchanges could face similar risks. It remains unclear whether the platform will be able to regain access to its USDT reserves or find alternative solutions.
What We Know About the Freeze
Tether has not publicly disclosed the reason for the freeze, but analysts suspect it is due to international sanctions.
Key facts:
- $27 million in USDT has been frozen.
- Garantex has suspended all operations.
- The crypto community fears more Russian exchanges may be affected.
The freeze highlights the risks of using USDT in sanctioned environments. Despite its popularity, Tether retains the ability to block any address without prior notice.
Garantex Was Already Under Sanctions
The move was not entirely unexpected. In April 2022, the U.S. Department of the Treasury and the Office of Foreign Assets Control (OFAC) sanctioned Garantex, accusing the exchange of facilitating money laundering through Russian darknet platforms like Hydra and the hacker group Conti. U.S. authorities claimed that more than $100 million in illicit transactions had passed through Garantex.
With growing regulatory pressure on the Russian crypto market, Tether’s actions suggest that even centralized stablecoins are no longer a safe option for Russian users.
What This Means for USDT Users in Russia
The Garantex freeze has sparked concerns that other Russian exchanges may face similar restrictions. If Tether continues blocking addresses, USDT usage in the country could become significantly more difficult.
Main risks:
- USDT held on Russian exchanges could be at risk.
- Tether is a centralized asset controlled by a U.S.-based company.
- Additional sanctions could further impact Russian crypto platforms.
Garantex has yet to announce whether it will contest the freeze or shift to alternative assets. However, users have already reported being unable to access their funds.
Centralized Stablecoins Under Regulatory Control
The Garantex case underscores that USDT, despite its dominance, remains a centralized asset subject to control by its issuer. Unlike Bitcoin, Tether has the power to freeze, block, and regulate transactions in compliance with government mandates.
As a result, some users are considering switching to decentralized stablecoins or other digital assets that cannot be frozen by a single entity. However, these alternatives currently lack the same liquidity and convenience as USDT.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.