Cryptocurrencies as instruments of sanctions evasion: the case of Garantex and its illicit network

Abstract

Cryptocurrencies are rapidly unraveling the effectiveness of economic coercion, allowing sanctioned actors to move value across borders with only fragments of an identity. This thesis examines that shift through a detailed case study of the cryptocurrency exchange Garantex, a platform that processed roughly US $96 billion in digital-asset trades, at least US $1.3 billion of which trace to ransomware crews, darknet vendors and sanctioned oligarchs. Framed by Disruptive Innovation, Transnational Organized Crime, Network and Sanctions-Busting theories, the research adopts a mixed-methods design using both qualitative and quantitative analysis. Results show that, following Russia’s 2022 invasion of Ukraine, Garantex and it's over-the-counter brokers rerouted 82 percent of targeted entities’ crypto through stablecoins, scripted address-rotation and continual re-branding, effectively sidestepping Western blacklists in real time. These findings demonstrate that sanctions architectures anchored in bank-centric choke points are becoming porous, and it highlights the urgent need for coordinated, near-real-time sharing of information and harmonized enforcement practices if economic sanctions are to retain credibility in an era of decentralized, programmable finance.