UK Targets Russia’s Crypto Shadow Network: Ruble Stablecoin Bypasses Western Sanctions

The UK has imposed sanctions on a Kyrgyz financial network and cryptocurrency infrastructure tied to Russia, targeting entities it says are being used to circumvent Western sanctions imposed following Russia’s invasion of Ukraine in 2022. The measures focus on Grinex, a Kyrgyz cryptocurrency exchange, and A7A5, a stablecoin pegged to the Russian ruble that has processed over $9.3 billion in value since its launch in April 2025. The UK’s action aligns with similar moves by the U.S., reflecting a coordinated international effort to disrupt Russian efforts to evade sanctions through the cryptocurrency ecosystem [4].

According to UK officials, A7A5 is issued by Old Vector, a Kyrgyz company, and is backed by ruble deposits at the sanctioned Russian bank Promsvyazbank (PSB). The stablecoin was designed to facilitate the recovery of frozen assets from Garantex, a previously sanctioned Russian exchange. When U.S. and international authorities seized Garantex’s domain in March 2025 and froze over $26 million in assets, Garantex users were compensated in A7A5 tokens, which could then be traded or redeemed on Grinex, effectively re-establishing access to their funds [3].

Grinex, described as a successor platform to Garantex, has been central to the A7A5 ecosystem. Alongside Grinex, the UK sanctioned Meer, a centralized exchange registered on the same day as Grinex and A7A5. These platforms collectively form a network that facilitates the movement of ruble-backed value across borders, circumventing the traditional financial system and U.S. and UK sanctions. The U.S. Treasury has also taken similar action, designating Grinex, Old Vector, and several executives for their roles in enabling cryptocurrency-based sanctions evasion and supporting illicit transactions [1].

The A7A5 token has seen significant trading activity, with over $9.3 billion processed through its network since inception. The token is available on Ethereum and TRON blockchains and offers yield to its holders, paying 50% of the interest earned on its underlying bank deposits. Unlike mainstream stablecoins, A7A5 is designed not only as a medium of exchange but also as a tool for Russian actors to conduct transactions outside the reach of Western financial systems. Crypto forensics firm Elliptic estimates that over $1 billion in A7A5 has moved daily through the network [3].

The UK’s sanctions are part of a broader strategy to counter Russia’s financial resilience in the face of Western economic pressure. Alongside Grinex and Old Vector, the UK has targeted Capital Bank, a Kyrgyz financial institution used to channel payments for Russian military goods, and its director, Kantemir Chalbayev. The bank has been identified as a key node in the network enabling Russia to maintain financial operations despite sanctions. The measures also extend to three individuals and a Luxembourg-based firm linked to Russia’s financial infrastructure, reflecting the cross-border and multi-jurisdictional nature of these evasion schemes [4].

The U.S. and UK actions highlight the growing role of cryptocurrencies in sanctions evasion and the need for enhanced monitoring and enforcement. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has designated A7A5’s issuer, Old Vector, and its affiliated entities for facilitating transactions with sanctioned Russian institutions. OFAC’s analysis shows that A7A5 and its supporting infrastructure represent a deliberate effort to create alternative payment rails in response to Western sanctions. This includes the use of decentralized exchanges and obscure trading platforms to integrate ruble-backed tokens into the broader crypto ecosystem [1].

Source:

[1] How A7A5 and Grinex Enable The Russian Shadow (https://www.chainalysis.com/blog/a7a5-grinex-russian-crypto-economy-ofac-sanctions-august-2025/)

[2] Treasury Sanctions Cryptocurrency Exchange and Network (https://home.treasury.gov/news/press-releases/sb0225)

[3] UK sanctions crypto exchange tied to Russian ruble stablecoin (https://finance.yahoo.com/news/uk-sanctions-crypto-exchange-tied-205416234.html)

[4] UK targets sanctions circumvention and crypto networks (https://www.gov.uk/government/news/uk-targets-sanctions-circumvention-and-crypto-networks-exploited-by-russia)