It has not been a good week for Russian crypto exchange Garantex.
Firstly, on Thursday, stablecoin issuer Tether blocked access to Garantex’s wallets that held around $28 million of the crypto exchange’s funds. On the same day, an international law enforcement operation led by the U.S. Secret Service seized Garantex’s official websites. At the time, Garantex made no mention of this operation in its official Telegram channels; instead, the company announced it was “suspending all services, including cryptocurrency withdrawals.”
Then, on Friday, the U.S. Justice Department announced charges against two of the exchange’s administrators, Aleksej Besciokov, and Aleksandr Mira Serda, accusing the pair of facilitating money laundering on their platform on behalf of cybercriminals and terrorists. U.S. prosecutors also said it froze over $26 million in Tether and Bitcoin that were used to facilitate money laundering, which explained what happened with the Tether wallets.
As of Saturday, Garantex offered a potential lifeline to its customers — with a catch.
Without acknowledging the law enforcement actions, Garantex published an announcement on its official Telegram channel saying it has “developed a solution for blocked assets,” and is inviting customers with a positive account balance “to a personal meeting in our Moscow office,” according to a machine translation.
Garatex said it will start “face-to-face meetings” in its office as of Monday, and is asking customers to arrive “with the phone to which the account is linked and with access to your email,” because the company “may need to send you confirmation codes,” its announcement read.
The company’s request is unusual, in a world that highly values anonymity like the world of crypto. Showing up at the offices of a company that’s been sanctioned by both the U.S. government and the European Union poses difficult-to-predict risks to customers, notwithstanding the risk from the Russian government itself, and there’s no guarantee at this point that Garantex will be able to refund customers.
It’s unclear exactly how many customers Garantex has, but the exchange has processed more than $96 billion in cryptocurrency transactions since 2019, according to the DOJ. Garantex likely has a large number of customers, many of which don’t live anywhere near Moscow.
Garantex did not respond to a request for comment.
