Client Alert: OFAC Sanctions Cryptocurrency Exchange and Network
On August 14, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) re-designated the cryptocurrency exchange Garantex Europe OU (“Garantex”) pursuant to Executive Order (EO) 13694 (as further amended by E.O. 14144 and E.O. 14306) authorizing sanctions to combat the activities of cyber criminals. Specifically, OFAC alleged that Garantex directly facilitated cybercriminals by processing over $100 million in transactions linked to illicit activities since 2019. OFAC had previously designated Garantex on April 5, 2022, pursuant to EO 14024 for operating in the financial services sector of the Russian Federation economy. The more recent action is an additional designation on top of the prior Russian action. In addition, as part of the August 14th action, OFAC also designated Garantex’s successor, Grinex, as well as three Garantex executives and six associated companies in Russia and the Kyrgyz Republic that have supported the exchange’s involvement in malicious cyber activities, including the companies A7, A71, A7 Agent, Old Vector, Independent Decentralized Finance Smartbank and Ecosystem (InDeFi Bank), and Exved.
Garantex and Grinex
Garantex is a cryptocurrency exchange founded in late 2019 that conducts most of its operations from Moscow and Saint Petersburg. It was originally registered in Estonia but lost its license in 2022 due to AML/CFT failings. Garantex provides services for illicit actors, develops technological infrastructure to obscure wallet attribution, and has facilitated transactions for actors associated with Russia-linked ransomware group Ryuk.
Grinex was created by Garantex employees to evade the OFAC sanctions on Garantex. Garantex transferred customer funds to Grinex and enabled users to regain access through the A7A5 token, a ruble-backed digital asset. The token was developed by a Kyrgyzstani firm called Old Vector in coordination with Garantex and others, and was issued to compensate Garantex users who lost revenue. The A7A5 token was created for Russian customers of A7 LLC, a Russian firm whose owners are also sanctioned and which provides cross-border settlement platforms to facilitate sanctions evasion.
Broader trend to sanction crypto platforms
This action is part of a broader trend to sanction illicit and criminal crypto platforms. In September 2024, OFAC imposed sanctions against Cryptex for providing financial services to cybercriminals, and in October 2024, the Financial Crimes Enforcement Network identified PM2BTC, a convertible virtual currency exchanger, as a financial institution of “primary money laundering concern.” The current administration’s support for crypto currencies should not be construed as reluctance to take action against crypto platforms that support criminal networks or otherwise conflict with U.S. policy objectives.
Key Takeaways
Firms interacting with crypto platforms, whether they are financial institutions or platforms and service providers, must update internal controls, screening procedures, and sanctions risk assessments, particularly for entities facilitating large-scale transfers. Activities involving ruble-backed tokens (e.g., A7A5), decentralized finance platforms, or asset migration technologies warrant greater due diligence in the current environment.
The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.