The U.S. Department of Justice announced on Friday criminal charges against the administrators of the Russian cryptocurrency exchange Garantex for allegedly facilitating money laundering by criminal and terrorist organizations, as well as violating U.S. sanctions.
The two administrators are Lithuanian national and Russian resident Aleksej Besciokov, 46, and Aleksandr Mira Serda, 40, a Russian national residing in the United Arab Emirates, who “knew that criminal proceeds were being laundered through Garantex and took steps to conceal the facilitation of illegal activities on its platform,” according to the indictment against them.
The DOJ said that Garantex “received hundreds of millions in criminal proceeds and was used to facilitate various crimes, including hacking, ransomware, terrorism, and drug trafficking,” and that the exchange processed at least $96 billion in cryptocurrency transactions since 2019.
In the indictment, prosecutors accuse Besciokov of personally allowing transactions linked to cybercriminals, including the North Korean-government hackers known as Lazarus Group.
The announcement of the indictment came a day after the U.S. Secret Service and a coalition of law enforcement agencies took down and seized the official websites of Garantex, replacing their contents with a banner featuring the agencies’ logos and announcing the site’s seizure.
When TechCrunch reached out to three Garantex email addresses listed on its official page prior to the takedown, our emails were returned as undelivered. Garantex did not respond to multiple requests for comment through its official Telegram channel.
Besciokov and Mira Sera are both accused of a money laundering conspiracy, while Besciokov is also accused of conspiracy to violate sanctions and conspiracy, and of operating an unlicensed money transmitting business. Both face a maximum of 20 years in prison for the money laundering charge, while Besciokov faces another maximum sentence of 20 years for conspiracy to violate U.S. sanctions, and another maximum of five years for conspiracy to operate an unlicensed money transmitting business.
It’s unclear if the two have been arrested. Shannon Shevlin, a spokesperson for the Department of Justice, told TechCrunch that the DOJ doesn’t know if Mira Serda has been arrested in the UAE.
The two charged Garantex administrators could not be reached by TechCrunch for comment.
U.S. prosecutors alleged that Besciokov and Mira Serda knew that their crypto exchange was used for money laundering and actively worked to make that happen even when Russian authorities asked questions. According to the DOJ, when Russian law enforcement requested records at some point related to a Mira Serda account on Garantex, the company provided incomplete information, and “claimed the account was not verified.”
“In reality, Garantex had associated the account with Mira Serda’s personal identifying documents,” according to the indictment.
Millions in crypto seized, DOJ confirms
Garantex has been the focus of Western government action for several years.
In 2022, as part of a series of actions against Russian cybercrime, the U.S. Treasury sanctioned Garantex, mentioning an analysis that showed that “over $100 million in transactions are associated with illicit actors and darknet markets, including nearly $6 million from Russian [Ransomware as a Service] gang Conti and also including approximately $2.6 million from [darknet market] Hydra.”
Also, in 2024, as part of a series of sanctions against Russia for invading Ukraine, the European Union sanctioned Garantex, alleging the exchange is “closely associated with EU-sanctioned Russian banks.”
According to the DOJ, despite sanctions imposed by the U.S. government, Besciokov and his co-conspirators violated sanctions law by continuing to accept transactions with U.S.-based entities, and also “redesigned Garantex’s operations to evade and violate U.S. sanctions and induce U.S. businesses to unwittingly transact with Garantex in violation of the sanctions.”
“For example, Garantex moved its operational cryptocurrency wallets to different virtual currency addresses on a daily basis in order to make it difficult for U.S.-based cryptocurrency exchanges to identify and block transactions with Garantex accounts,” read the DOJ announcement.
The DOJ also said that U.S. law enforcement froze over $26 million in funds used to facilitate Garantex’s money laundering. DOJ spokesperson Shevlin told TechCrunch that the department froze a total of 23,034,884.75 Tether and 35.57 Bitcoin on Binance (worth around $3 million as of Friday), amounting to about $26.2 million.
Even before these law enforcement actions, Garantex announced on Thursday that it had suspended “all services, including cryptocurrency withdrawals,” after stablecoin issuer Tether blocked wallets belonging to Garantex that were holding more than $28 million.
“We have bad news. Tether has entered the war against the Russian crypto market,” Garantex wrote on its official Telegram channel in an announcement. “We are fighting and will not give up! Please note that all [Tether] in Russian wallets is currently under threat. As always, we are the first, but not the last.”
After the DOJ’s announcement on Friday, Garantex posted an alert on Telegram about scammers “pretending to be the restored Garantex exchange or offering to withdraw funds.”
“These are all scammers! Their goal is to gain access to users’ personal data, wallet addresses and other sensitive information,” the announcement in Russian read, according to a machine translation of it.
The announcement made no mention of the website takedown, nor of the indictments of Besciokov and Mira Serda.