Blockchain analysts warn that the Russian government may use crypto exchanges like Garantex for sanctions evasion under the new legislation.
The Russian government is likely to rely on domestic crypto exchanges like Garantex for sanctions evasion as it adapts to new crypto regulations, analysts at Chainalysis alarm.
In a recent blog report, Chainalysis noted that Garantex, a platform that has processed nearly $100 billion in transactions since 2018, offers deep liquidity across major blockchains, making it a potential tool for Russia’s efforts to maintain cross-border trade amid financial restrictions.
Although the report emphasizes that Garantex’s large-scale transaction volume does not directly indicate state-sponsored sanctions evasion, the analysts warn that the exchange’s capabilities could be leveraged for such purposes.
“It’s important to note that not all Garantex users are Russian nationals or Russia-based, nor do they operate on behalf of the Russian government.”
Chainalysis
Another potential vehicle for sanctions evasion is the crypto exchange Exved, the analysts say, noting that it has worked closely with InDeFi Bank, co-founded by Garantex founder Sergey Mendeleev and former KGB officer Alexander Lebedev. Exved has reportedly been involved in facilitating imports and exports, even before Russia’s recent legislative changes around cryptocurrency, the report reads.
The warning comes in the wake of new laws signed by Russian President Vladimir Putin, officially legalizing Bitcoin mining and crypto trading what is being viewed as part of a broader strategy to use crypto as a workaround for sanctions that have severely impacted Moscow’s ability to engage in cross-border trade.
While the extent to which Russian government entities are currently involved in using platforms like Garantex and Exved for sanctions evasion remains unclear, the report underscores growing concerns that Russia may increasingly turn to crypto channels, potentially marking a significant evolution in how nations facing economic isolation use digital assets to maintain financial connections globally.