Chainalysis warns that Russia may use domestic crypto exchange Garantex, which has processed nearly $100 billion since 2018, to evade sanctions under new crypto regulations.
Chainalysis analysts have expressed concern that the Russian government may turn to domestic crypto exchanges such as Garantex to circumvent sanctions as it adjusts to new crypto regulations.
Garantex, a platform that has processed nearly $100 billion in transactions since 2018, is a potential tool for Russia’s efforts to maintain cross-border trade amid financial restrictions, according to a recent blog report by Chainalysis. Garantex provides deep liquidity across major blockchains.
Despite the report’s assertion that Garantex’s substantial transaction volume does not explicitly suggest state-sponsored sanctions evasion, the analysts caution that the exchange’s capabilities could be exploited for this purpose.
“It’s important to note that not all Garantex users are Russian nationals or Russia-based, nor do they operate on behalf of the Russian government.”
Chainalysis
The crypto exchange Exved is another potential vehicle for sanctions evasion, according to the analysts.
They also mention that it has collaborated closely with InDeFi Bank, which was co-founded by Garantex founder Sergey Mendeleev and former KGB officer Alexander Lebedev.
Exved has purportedly been involved in the facilitation of imports and exports prior to the recent legislative changes regarding cryptocurrency in Russia, according to the report.
In the aftermath of the recent signing of new laws by Russian President Vladimir Putin, which officially legalized Bitcoin mining and crypto trading, the warning is being interpreted as part of a broader strategy to employ crypto as a workaround for sanctions that have significantly impeded Moscow’s ability to engage in cross-border trade.
Although it is uncertain to what extent Russian government entities are currently engaged in the use of platforms such as Garantex and Exved to evade sanctions, the report emphasizes the increasing apprehension that Russia may increasingly rely on crypto channels, which could represent a substantial change in the way nations that are experiencing economic isolation maintain financial connections on a global scale by utilizing digital assets.
