The legal entity of the Garantex cryptocurrency exchange has relinquished its license to work with virtual currencies after discovering a number of systemic violations in its activities. This was reported to ForkLog by representatives of the Estonian Money Laundering Data Bureau (RAB).
The Financial Intelligence Unit launched an audit of Garantex Europe OÜ in December 2021. According to the head of RAB Mathis Mäeker, the company attracted the attention of the supervisory authority with an annual turnover exceeding 5 billion euros, as well as links with Russia and other high-risk countries.
RAB experts found that the exchange took “inadequate” measures to prevent the risks of money laundering and terrorist financing. Among them, there is a shortage of personnel, an illiterate risk appetite strategy, and a violation of internal control procedures.
The trading platform has systematically failed to notify RAB of suspicious transactions related to money laundering or terrorist financing. It was also established that the property moved through Garantex Europe OÜ was associated with crime or wallets used by criminals for illegal purposes.
Since the identified deficiencies would have led to the cancellation of the company’s permission for economic activity at the end of the proceedings, Garantex Europe OÜ independently refused it, according to RAB. Her license was valid from November 27, 2020 to February 24, 2022.
In a comment to ForkLog, representatives of Garantex Europe OÜ explained their decision by the entry into force of new rules for licensing the activities of cryptocurrency exchanges in Estonia.
Recall that in mid-February, Chainalysis analysts reported that more than $645 million associated with suspicious transactions in the period 2019-2021 went through Garantex. According to them, the exchange received over $10 million from ransomware operators, including NetWalker, Phoenix Cryptolocker and Conti.
Then, in a comment to ForkLog, Garantex representatives stated that they were cooperating with Crystal analysts and blocking all transactions marked as “ransomware” in a timely manner.