U.S. Sanctions Eight Cryptocurrency Wallets Linked to Houthis, Garantex

The United States has taken a significant step in its efforts to combat illicit activities by sanctioning eight cryptocurrency wallet addresses. These addresses are linked to the Russian cryptocurrency exchange Garantex and the Yemeni political and military organization known as the Houthis. The action was taken by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) following data from blockchain forensic firms Chainalysis and TRM Labs, which identified the addresses as being associated with these entities. Two of the sanctioned addresses are deposit addresses at major cryptocurrency platforms, while the remaining six are privately controlled.

The sanctioned addresses are reported to have moved nearly $1 billion in funds, with most of the transactions supporting Houthi operations in Yemen and the Red Sea region. This move underscores the growing recognition of cryptocurrency's role in geopolitical conflicts and terrorism financing. Slava Demchuk, a specialist in crypto-focused money laundering and a consultant for the United Nations Office on Drugs and Crime, highlighted the far-reaching implications of this action. He noted that compliance frameworks will need to adapt swiftly, attribution efforts will intensify, and decentralized platforms may face increased scrutiny. Demchuk emphasized that this situation reshapes the regulatory landscape, placing cryptocurrency firmly within the scope of international security.

The Houthis, also known as Ansar Allah, are a Yemeni political and armed movement that emerged from the Zaidi Shia community. Initially a revivalist and reformist group, they have become a major force in Yemen's ongoing conflict. In recent years, the Houthis have engaged in attacks against both military and civilian vessels in the Red Sea using missiles and drones. In January, the group was designated as a foreign terrorist organization by the United States, with the announcement noting that their activities threaten the security of American civilians and personnel in the Middle East, the safety of regional partners, and the stability of global maritime trade. The group has recently been the target of a U.S. bombing campaign.

Garantex, the Russian cryptocurrency exchange implicated in this sanctions action, was previously sanctioned and shut down in early March. The exchange was accused of facilitating money-laundering efforts. At the time, Tether, the leading stablecoin operator and issuer of USDt, froze $27 million in USDt on the platform, forcing it to halt operations. Despite these actions, Garantex reportedly shifted millions of dollars as it sought to reboot under a new brand, "Grinex." In mid-March, officials with India’s Central Bureau of Investigation announced the arrest of Lithuanian national Aleksej Bešciokov, who was alleged to have operated the cryptocurrency exchange Garantex. The arrest was based on U.S. charges of conspiracy to commit money laundering, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate the International Emergency Economic Powers Act.