Garantex Exchange Sanctions: How Russian Crypto Traders Are Adapting

When the U.S. Treasury slapped sanctions on Garantex in April 2022, most thought it would be the end of the line for this Russian crypto exchange. But by August 2025, after another round of sanctions targeting its role in laundering over $100 million in cybercrime funds, the real story became clear: Garantex didn’t die. It evolved.

What Happened to Garantex?

Garantex was never just another crypto exchange. Founded in 2019 by Sergey Mendelev and Aleksandr Mira Serda, it started as a Russian-focused platform with Estonian paperwork - a classic shell setup. But its real power came from how deeply it was woven into Russia’s underground financial network. It wasn’t just buying and selling Bitcoin. It was moving money for ransomware gangs, darknet markets, and sanctioned Russian elites.

The U.S. Treasury didn’t just freeze accounts. They labeled Garantex a systemic threat to global financial integrity. By August 2025, Treasury Secretary Janet Yellen called it a "critical infrastructure for cybercriminals." The FBI confirmed Garantex processed over $100 million in transactions tied to known criminal actors - mostly in USDT, the stablecoin that moves like cash but leaves no paper trail.

After the March 2025 international takedown - where U.S., German, and Finnish agents seized servers and froze $26 million - Garantex didn’t shut down. It split. The core team launched Grinex, Exved, and MKAN Coin. These aren’t competitors. They’re branches of the same network, each handling a different piece of the puzzle.

How Russian Traders Still Use It

Despite the sanctions, over 18.7 million Russians still use crypto - up 22% in just one year, according to the Central Bank of Russia. And Garantex’s ecosystem is still their go-to bridge to the outside world.

Here’s how it works in practice:

1. A Russian trader converts rubles into USDT using a local P2P agent.
2. That USDT gets sent to Feilian Company Limited, a Hong Kong-based shell with an account at Alfa-Bank.
3. Feilian then sends dollars, yuan, or more USDT to a foreign supplier - say, a electronics vendor in Thailand or a crypto liquidity provider in Dubai.
4. The trader gets their goods, or cashes out abroad, without ever touching a Western bank.

This isn’t magic. It’s a multi-jurisdictional maze. The crypto part stays invisible to Russian banks. The ruble-to-dollar conversion happens through Hong Kong and UAE entities. No one sees the full picture.

A user on the Russian Telegram channel CryptoNews summed it up: "Even after sanctions, I can still convert rubles to USDT and send them abroad in 24 hours without my Russian bank flagging anything."

The Hidden Costs

It’s not free anymore.

Before the sanctions, Garantex charged 0.1% to 0.3% per trade. Now, users on forums like BitBrothers report fees jumping to 1.5% - a 15x increase. Why? Because the system is riskier. Every transaction now has to pass through more middlemen, more shell companies, more layers of obfuscation.

New users face a steep learning curve. Two years ago, you could sign up, verify your ID, and start trading in a week. Now, it takes 3-4 weeks just to get connected to a trusted agent. The official support channels are gone. In their place: Telegram bots that answer with "wait" or "contact admin." Real help comes from other users in private groups - sharing tips like which Hong Kong agent still processes transfers or which UAE wallet address is still active.

Documentation? It’s a mess. No more KYC forms. No more customer service emails. Just whispers in encrypted chats.

The Bigger Picture: Russia’s Crypto Evasion Network

Garantex isn’t alone. The Treasury sanctioned six other companies alongside it: A7, A71, A7 Agent, Old Vector, InDeFi Bank, and Exved. Exved, headquartered in Moscow-City, handles cross-border payments for dual-use goods - things like microchips and medical equipment Russia can’t legally import.

Together, this network moves an estimated $300 million per month. That’s 15% of all Russian crypto-based international transfers, according to Transparency International Russia’s September 2025 report.

Chainalysis data shows Russia accounts for about 12% of global crypto-related illicit activity. That’s not because Russians are uniquely criminal. It’s because they’re uniquely constrained. Sanctions cut them off from Visa, SWIFT, and Western banks. Crypto became the only open pipeline.

Who’s Still Using It - And Why

You might think only criminals use this system. But that’s not true.

Small business owners in St. Petersburg use it to pay for cloud servers hosted in Singapore. Students studying abroad send tuition money through it. Freelancers get paid in crypto because Western platforms like PayPal and Stripe blocked them. Even some former Garantex employees now run Telegram-based services that mimic the old platform - quietly, anonymously, profitably.

The real driver isn’t crime. It’s survival.

When your bank freezes your account because you sent $5,000 to a German supplier, and your government says you can’t legally buy foreign currency - crypto isn’t a choice. It’s the only way out.

What This Means for the Future

The U.S. and its allies thought sanctions would cripple Russia’s crypto ecosystem. Instead, they forced it to become more sophisticated.

As Chainalysis CEO Michael Gronager put it in September 2025: "Sanctions are creating more sophisticated, harder-to-track money laundering systems rather than eliminating them." The old model - centralized exchange with a website and a support desk - is dead. The new model is a decentralized web of Telegram bots, shell companies, and offshore wallets spread across eight countries. It’s harder to shut down because there’s no single point of failure.

The $6 million reward offered by the State Department for information leading to the arrest of Garantex’s founders shows how seriously they’re taking this. But arrests won’t fix it. The infrastructure is too distributed. The users are too desperate.

Is There a Way Out?

For Russian traders, there’s no clean solution. Western regulators aren’t going to lift sanctions. Russian banks won’t offer foreign exchange. And crypto exchanges outside Russia won’t touch them.

The only path forward is adaptation - learning how to navigate the underground system, finding trustworthy agents, accepting higher fees, and accepting that your financial life will always be one step away from being flagged.

It’s not sustainable. But right now, it’s the only option.