As exposed by FinTelegram a few years ago, Garantex was one of the vast Russian crypto-based money laundering schemes facilitating cybercrime activities. Grinex, a cryptocurrency exchange identified as the suspected successor to the sanctioned Russian platform Garantex, has reportedly moved more than $1.66 billion in crypto through exchanges, despite red flags raised by blockchain analytics firm Global Ledger.
5 KEY POINTS
- $1.66B Transferred via Grinex: Grinex has allegedly moved over $1.66 billion through approximately 180 cryptocurrency exchanges, primarily using Tron-based USDt (Tether).
- Direct Transactions Without Obfuscation: Many of these transactions were direct, lacking intermediary addresses or obfuscation techniques, facilitating traceability.
- Limited Exchange Response: Among major exchanges contacted, only Binance responded, stating it monitors and blocks exposure to sanctioned entities.
- Garantex’s History of Sanctions: Garantex was sanctioned in April 2022 for facilitating illicit transactions, including those linked to ransomware and darknet markets.
- Emergence of Grinex Post-Sanctions: Following enforcement actions against Garantex, Grinex emerged, continuing similar operations and raising concerns among compliance professionals.
SHORT NARRATIVE
In the wake of Garantex‘s shutdown due to sanctions and law enforcement actions, Grinex has surfaced as a suspected successor, facilitating substantial cryptocurrency transactions. Despite warnings from blockchain analytics firms, Grinex has moved over $1.66 billion through various exchanges, primarily using Tron-based USDt. The direct nature of these transactions, without obfuscation, and limited responses from major exchanges highlight ongoing challenges in enforcing compliance and preventing illicit financial flows in the crypto ecosystem.
EXTENDED ANALYSIS
The transition from Garantex to Grinex underscores the resilience and adaptability of entities seeking to circumvent sanctions and regulatory scrutiny. Garantex, sanctioned in 2022 for facilitating illicit activities, including transactions linked to ransomware and darknet markets, reportedly rebranded as Grinex following enforcement actions.
Grinex‘s operations have raised alarms among compliance professionals and regulators. The use of Tron-based USDt for direct transactions through numerous exchanges without obfuscation suggests a bold approach, potentially exploiting gaps in compliance frameworks. The limited response from major exchanges, with only Binance acknowledging monitoring efforts, indicates a need for more robust industry-wide compliance measures.
Read our Garantex reports here.
This situation reflects broader challenges in the crypto industry, where entities can rebrand and resume operations despite prior sanctions. It emphasizes the importance of continuous monitoring, information sharing, and the implementation of stringent compliance protocols to detect and prevent illicit activities.
ACTIONABLE INSIGHT
Compliance officers and financial institutions should enhance their transaction monitoring systems to detect direct transfers involving high-risk entities like Grinex. Implementing real-time analytics and collaborating with blockchain intelligence firms can aid in identifying suspicious activities. Regularly updating risk assessments and ensuring adherence to the Travel Rule are critical in mitigating exposure to illicit financial flows.
CALL FOR INFORMATION
FinTelegram invites insights and information regarding internal compliance practices within crypto exchanges, particularly in light of recent regulatory developments. Contributions that shed light on how firms are adapting to the changing regulatory landscape are welcome. Please contact us securely to share your expertise.
