US, EU authorities dismantle Garantex in money laundering crackdown

US and European law enforcement agencies have disrupted Garantex, a Russia-linked crypto exchange accused of laundering billions of dollars for cybercriminals, drug traffickers, and sanctioned entities, as announced by the Justice Department on Friday. In a coordinated operation with Germany and Finland, US authorities seized multiple domains associated with Garantex and froze over $26 million in assets connected to illicit transactions. Law enforcement in Germany and Finland also took control of servers supporting the platform's operations. The crackdown coincided with the unsealing of an indictment in the Eastern District of Virginia against Aleksej Besciokov, a Lithuanian national residing in Russia, and Aleksandr Mira Serda, a Russian national based in the UAE. Both are charged with conspiracy to commit money laundering, while Besciokov faces additional charges of violating U.S. sanctions and operating an unlicensed money-transmitting business. Authorities alleged that Garantex processed at least $96 billion in crypto transactions since its establishment in April 2019, facilitating various crimes like ransomware payments, darknet drug sales, and financial transactions associated with terrorist organizations. Besciokov, identified as Garantex's primary technical administrator, allegedly managed the platform's infrastructure and approved transactions, while Mira Serda, a co-founder and chief commercial officer, oversaw its business operations. Prosecutors mentioned that the defendants knowingly concealed illegal activities on the exchange, obstructed Russian law enforcement inquiries, and continued processing transactions for US-based entities despite being sanctioned by the Treasury Department's Office of Foreign Assets Control (OFAC) in April 2022. To evade sanctions, Garantex purportedly moved its crypto holdings between wallets daily, making it challenging for compliance teams at major exchanges to block transactions. US Attorney Erik S. Siebert of the Eastern District of Virginia stated: "Garantex was a haven for criminals seeking to launder illicit funds through crypto, and this takedown demonstrates our global commitment to dismantling such networks." The exchange, which operated post-OFAC's designation, failed to register with the Financial Crimes Enforcement Network (FinCEN) as mandated for money service businesses in the US. On March 6, the US Secret Service, with a court order, seized three Garantex-related domains — Garantex.org, Garantex.io, and Garantex.academy — redirecting visitors to a law enforcement notice confirming the sites' takedown. If convicted, Besciokov and Mira Serda could each face up to 20 years in prison for money laundering conspiracy. Besciokov might receive an additional 25 years for sanctions violations and running an unlicensed money-transmitting business. The FBI and the US Secret Service spearheaded the investigation, with support from Europol and law enforcement agencies in Germany, Finland, the Netherlands, and Estonia. Blockchain analytics firm Elliptic and stablecoin issuer Tether also aided in identifying illicit transactions linked to Garantex. It is essential to note that the charges against Besciokov and Mira Serda are allegations, and they are presumed innocent until proven guilty in court. The original post can be found on CryptoSlate.  [Watch the video about Garantex crackdown](garantex_video.mp4)