Russian likely to rely on Garantex for sanctions evasion with new legislation, Chainalysis alerts

Blockchain analysts warn that the Russian government could use cryptocurrency exchanges like Garantex to evade sanctions under new legislation.

Analysts at Chainalysis say the Russian government is likely to rely on local cryptocurrency exchanges like Garantex to avoid sanctions while complying with new crypto regulations.

Garantex, which 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, Chainalysis said in a recent blog post.

While the report stresses that Garantex’s large-scale trading volume does not directly indicate an attempt to evade state-backed sanctions, analysts warn that the exchange’s capabilities could be used for such purposes.

“It is important to note that not all Garantex users are Russian citizens or residents of Russia and they do not operate on behalf of the Russian government.”

Chain analysis

Another potential tool to evade sanctions, analysts say, is cryptocurrency exchange Exved, which works closely with InDeFi Bank, founded by Garantex founder Sergey Mendeleev and former KGB officer Alexander Lebedev. Exved was reportedly involved in facilitating imports and exports even before Russia’s recent cryptocurrency-related legal changes, the report said.

The warning comes after Russian President Vladimir Putin signed new laws formally legalizing bitcoin mining and cryptocurrency trading, part of a broader strategy aimed at using cryptocurrencies as a way around sanctions that have severely impacted Moscow’s ability to conduct cross-border trade.

While it is not yet clear to what extent Russian government entities are currently involved in using platforms like Garantex and Exved to circumvent sanctions, the report highlights growing concerns that Russia may increasingly turn to crypto channels, which could signal a significant evolution in how countries facing economic isolation use digital assets to maintain financial connections globally.