Crypto exchange Garantex has suspended all operations following a $27 million USDT freeze. This occurred amid new EU sanctions related to Garantex's involvement with sanctioned Russian banks.
Why Did Garantex Face a USDT Freeze?
The core issue lies in expanding sanctions against Russia. Following events in Ukraine, both the U.S. and the EU have intensified financial restrictions. Garantex, already sanctioned by the U.S. in 2022, is now targeted by the EU for alleged links with Russian banks. This led Tether to freeze assets linked to Garantex as per EU sanctions.
Impact of the Freeze on Garantex and Its Users
The immediate result of the USDT freeze was the suspension of all Garantex operations, including withdrawals. Users, particularly in Russia, face the risk of losing access to their funds. This has led to panic and uncertainty, severely damaging the exchange's reputation.
Implications for the Crypto Market and Sanctions
The Garantex situation highlights increased regulatory scrutiny on the crypto industry regarding sanctions. Centralized exchanges like Garantex are more vulnerable to sanctions. This could drive interest in decentralized platforms, which are less susceptible to external control.
The Garantex saga is a reminder of the increasing regulation of the crypto industry. Exchanges and users must adapt to new realities to stay secure amid evolving global sanctions landscapes.
