Tether freezes $28M USDT on Garantex, forcing the exchange to halt services

Russian cryptocurrency exchange Garantex has temporarily suspended all its services after Tether froze $28 million worth of USDT held on the exchange.

The announcement came via a Telegram post from Garantex on March 6, 2025, detailing the suspension of all operations, including cryptocurrency withdrawals.

The exchange disclosed that Tether’s action impacted wallets containing over 2.5 billion rubles worth of USDT—equivalent to roughly $28 million.

Garantex labeled Tether’s freeze as part of a broader “war against the Russian crypto market,” pledging to resist the measure.

Garantex was founded in late 2019 and initially registered in Estonia.

Why did Tether freeze the USDT?

Tether’s decision stems from mounting international pressure on Garantex due to sanctions imposed by Western authorities.

The exchange has long been accused of having ties to the Russian government and criminal organizations.

Back in April 2022, the US Treasury’s Office of Foreign Assets Control (OFAC) blacklisted Garantex, citing its role in facilitating illicit transactions, such as those linked to ransomware groups and darknet markets.

The European Union recently followed suit, adding Garantex to its sanctions list to target financial networks associated with Moscow.

Despite these measures, Garantex had managed to keep its operations running, relying on sanctioned Russian banks to serve its users.

However, the latest sanctions, combined with Tether’s compliance efforts, appear to have finally disrupted the exchange’s ability to function, leading to the current suspension.

Garantex takes a defiant stance

In response, Garantex has taken a combative tone.

Its Telegram statement accused Tether of targeting the Russian crypto ecosystem as a whole, warning that “all USDT in Russian wallets is now at risk.”

This ominous message suggests that other Russian platforms or individual users holding USDT could face similar freezes, amplifying anxiety among the country’s crypto users.

Meanwhile, Tether has remained silent, offering no public explanation for its actions despite past criticism over its dealings with Russian entities.

What does this mean for Russian crypto users?

The incident shines a spotlight on the vulnerabilities of centralized stablecoins like USDT, particularly in geopolitically sensitive areas.

For Russian users, the freeze introduces immediate risks, potentially pushing them to reconsider their reliance on USDT.

Some may turn to alternative stablecoins or decentralized cryptocurrencies that are harder for regulators to control, seeking to safeguard their assets from future interventions.

The broader Russian crypto market could also feel the fallout, seeing that Garantex, a key player in the region, provided significant liquidity for traders.

Its suspension may reduce trading options, dampen market activity, and even spark volatility as users scramble to adapt.

The ripple effects could reshape how Russians engage with digital assets in the near term.

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