U.S. Sanctions Crypto Network Aiding Russian Sanctions Evasion via A7A5 and Garantex-linked Entities

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has expanded its sanctions against Russian entities and individuals operating in the cryptocurrency space, targeting a network linked to the shuttered Moscow-based exchange Garantex and the ruble-backed stablecoin A7A5. The sanctions aim to disrupt Russian attempts to bypass international economic restrictions through digital assets and alternative financial systems [1]. The network, which includes companies, executives, and crypto wallets, is alleged to have facilitated over $100 million in illicit transactions tied to ransomware attacks and darknet market activity [2].

The actions against Garantex and its successor, Grinex, follow the seizure of the former’s domain and $26 million in assets by U.S. and European law enforcement in March 2025. Grinex allegedly took over user funds from Garantex and allowed continued access through the A7A5 stablecoin, which is linked to the Russian state bank Promsvyazbank (PSB) and Moldovan politician Ilan Shor [3]. PSB had previously been sanctioned for its involvement in defense-related financing.

The A7A5 token, developed by the Kyrgyzstan-based company Old Vector, has emerged as a key tool for Russian businesses to conduct cross-border transactions outside the traditional banking system. By the end of July 2025, A7A5 had exceeded $51.17 billion in total transaction volume, indicating its role in facilitating Russian economic activities under Western sanctions [4]. The token is primarily traded on platforms with Russian affiliations, such as Grinex and Bitpapa, and is often exchanged for major stablecoins via a decentralized exchange, raising concerns about its integration into the broader crypto ecosystem [5].

The Treasury’s move extends beyond exchanges to include individuals and affiliated entities. Garantex executives Sergey Mendeleev, Aleksandr Mira Serda, and Pavel Karavatsky were sanctioned for their roles in operating the network. These individuals were also associated with companies InDeFi Bank and Exved, which are accused of enabling sanctioned Russian entities to conduct transactions through crypto assets [6].

The U.S. Treasury’s action marks a broader shift in strategy, moving from targeting only the platforms themselves to also addressing the financial instruments and networks that support illicit activities. The A7A5 network exemplifies Russia’s efforts to build an alternative financial infrastructure using sanctioned exchanges, tokenized assets, and centralized platforms. This closed-loop system is designed to obscure the origins and destinations of funds, complicating enforcement efforts [7].

As Russia continues to develop crypto-based payment systems, the U.S. and its allies face a growing challenge in identifying and disrupting these networks. The transparency of blockchain data offers a potential tool for tracking such activities, but it also highlights the need for adaptive regulatory and enforcement strategies to keep pace with evolving tactics [8].

The sanctions underscore the expanding role of cryptocurrency in geopolitical and financial warfare, with the U.S. seeking to cut off Russian access to the global financial system through a multi-faceted approach targeting both infrastructure and individuals. The action reflects a broader trend of using digital finance as a battleground in the ongoing economic conflict with Russia.