Japan Freezes Assets of Russian Crypto Exchange Garantex Amid Expanded Sanctions Push

Japan has added the Russian cryptocurrency exchange Garantex to its asset-freeze list, aligning with international sanctions efforts. The move, announced by the Ministry of Foreign Affairs, the Ministry of Finance, and the Ministry of Economy, Trade, and Industry, requires Japanese entities to obtain government permission before making payments to Garantex or engaging in certain capital transactions with the firm.

The designation affects 33 Russian entities and nine individuals, including Garantex Europe OU, with the action taking effect immediately. Japanese institutions and other covered parties must now obtain government approval for payments and capital transactions involving the designated entities.

The measures are part of Japan's broader strategy to reduce Russia's earnings from crude oil exports and cut off financial facilitators that help Russian entities evade existing restrictions. This approach mirrors a shift in sanctions policy towards targeting parallel infrastructure that has emerged to replace conventional banks and payment systems.

Garantex has been under pressure since the early months of the war in Ukraine, with the U.S. Treasury's Office of Foreign Assets Control first sanctioning the exchange in April 2022. The platform has been linked to illicit actors, including the Conti ransomware group and the Hydra darknet marketplace, with more than $100 million in transactions allegedly passing through the platform.