The U.S. Secret Service, Assisted by Elliptic, Takes Down Sanctioned Russian Crypto Exchange Garantex

The U.S. Secret Service, supported by blockchain analytics firm Elliptic, dismantled the sanctioned Russian cryptocurrency exchange Garantex and froze $26 million in cryptoassets, authorities announced Friday.

Garantex’s Activities Revealed

According to Elliptic’s data, Garantex executed over $60 billion in transactions since the U.S. and EU imposed sanctions in April 2022 for allegedly laundering funds linked to ransomware, darknet markets, and North Korean cyberattacks. Despite efforts to disguise its wallet infrastructure, the report claims Garantex’s total transactions surpassed $96 billion, revealing attempts by Russian elites to bypass sanctions following the Ukraine invasion.

Evasion Tactics

Elliptic explained that Garantex utilized advanced cloaking techniques to evade detection, including rapidly generating new wallet addresses and deploying specific privacy tools. The blockchain analytics firm developed proprietary technology to identify wallets controlled by Garantex, uncovering that transactions were mainly in the stablecoin USDT issued on the Tron blockchain.

This methodology purportedly allowed real-time sanctions screening for clients and investigators. Garantex allegedly laundered cryptocurrency from notable crimes, including $30 million from the Lazarus Group-linked Horizon Bridge hack and funds associated with ransomware groups like Conti, Lockbit, and Black Basta. It also reportedly facilitated significant transactions in darknet markets, as per Elliptic’s tracing capabilities.

Indictment and Impact

The U.S. Department of Justice (DOJ) cited Elliptic’s intelligence in its indictment, emphasizing Garantex’s assistance to Russian oligarchs and illicit activities. This operation follows incidents such as the $1.4 billion Bybit theft, highlighting the role of rogue exchanges in global crime financing.

Elliptic noted the ongoing technological arms race between illicit actors and compliance firms, mentioning that other sanctioned entities are mimicking Garantex’s strategies. The company asserted that its tools are integrated into compliance programs of crypto businesses to detect illicit transactions. This report comes after Tether froze millions of USDT held on Garantex, leading to the exchange halting operations and the U.S. government seizing its website.