Garantex, a crypto exchange in Russia known for its association with ransomware groups and illegal darknet operations, has been shut down as part of a coordinated law enforcement action involving the U.S. Department of Justice.

On Thursday, officials from the U.S., Germany, and Finland confiscated Garantex’s websites and servers, and froze approximately $28 million in cryptocurrencies linked to the exchange, thanks to help from stablecoin issuer Tether.

The U.S. Treasury’s Office of Foreign Asset Control (OFAC) imposed sanctions on Garantex in 2022, citing the exchange for facilitating money laundering operations for notorious ransomware gangs, including Conti and Black Basta, along with darknet markets like Hydra, which was previously the largest such market prior to its own closure in 2022.

Despite these sanctions, Garantex continued to operate with little effect; according to blockchain analysts from Elliptic, the exchange processed over $60 billion in crypto transactions post-sanctions, totalling over $96 billion since inception.

Court documents revealed that Garantex failed to collect meaningful know-your-customer (KYC) details, enabling criminals to exploit its services unchecked. Registrations were made with bizarre names such as ‘Drug’, ‘hacker’, and even ‘God’.

Additionally, the exchange’s clients allegedly encompassed North Korea’s Lazarus Group, implicated in a recent $1.5 billion theft, alongside Russian oligarchs evading sanctions related to the conflict in Ukraine.

Following the crackdown, two operators of Garantex face criminal charges in the U.S. related to the exchange’s illicit operations.

In summary:
Garantex’s operations exemplified a failure to prevent abuse in the crypto ecosystem, leading to significant action from international authorities.