In a brazen escalation of sanctions evasion tactics, Russian firms and state-linked networks are funneling billions of dollars through cryptocurrencies to sustain trade, fund operations, and even meddle in foreign elections. Leaked documents from September 2025 reveal that the A7 financial network—controlled by sanctioned Moldovan oligarch Ilan Shor—has moved over $89 billion across borders in just 10 months, with cryptocurrencies like Tether’s USDT and the ruble-backed A7A5 stablecoin playing a central role. This underground economy, bolstered by Russia’s 2024 legalization of crypto for international payments, has processed $68 billion in A7A5 transactions alone, primarily with Asian partners, as Western restrictions tighten post-Ukraine invasion.
For global regulators, crypto investors, and businesses navigating compliance, this surge highlights crypto’s dual edge: a lifeline for sanctioned entities, but a traceable trail for enforcers. With US Treasury actions freezing millions and new laws on the horizon, Russia’s crypto pivot is under fire. Let’s unpack the mechanics, key players, and escalating cat-and-mouse game.
The A7 Network: Crypto’s Role in Moving $89 Billion
At the epicenter is A7, a sanctions-busting outfit owned by Shor and tied to Russia’s Promsvyazbank (PSB), which facilitates cross-border transfers via cash, promissory notes, and digital assets. Sanctioned by the US in August 2025, A7 has shifted to crypto-heavy methods after crackdowns on fiat channels like SWIFT.
Breakdown of A7’s crypto ops:
| Crypto Asset | Transaction Volume | Key Use Case | Backing/Issuer |
|---|---|---|---|
| USDT (Tether) | Heavily relied on; exact figure undisclosed | Stability for ruble conversions; payments to Asian partners | Tether (centralized, sanctioned risks) |
| A7A5 Stablecoin | $68 billion total (since launch) | Ruble-pegged transfers; business-to-business trade | Old Vector LLC (Kyrgyzstan), 1:1 backed by PSB ruble deposits |
| Other (Bitcoin, Ether) | Part of $89B total A7 flows | Oil trade settlements with China/India; election funding | Various exchanges like Garantex/Grinex |
A7A5, launched post the March 2025 Garantex shutdown (which froze $26M in USDT), trades mainly weekdays on Russia-linked platforms, indicating corporate use over retail. Leaks show Shor’s team using Telegram bots for Toncoin payouts to Moldovan activists, blending evasion with interference.
Broader Russian Crypto Evasion: From Oil to Mining
Russia’s crypto reliance dates to 2022 sanctions but exploded in 2024-2025 with laws permitting digital assets for foreign trade. Key vectors include:
- Oil and Trade: Firms convert yuan/rupees to rubles via Bitcoin, Ether, and USDT in $192B oil deals with China/India—crypto’s share is small but growing.
- Exchanges and Shadow Networks: Sanctioned Garantex processed $100B+ illicitly before its 2025 takedown; successor Grinex moved billions more. Kyrgyz exchanges, booming due to lax regs, now launder via Russian wallets.
- Mining and State Backing: Legalized in August 2024, mining generated $3.5B in Bitcoin (2nd globally), powering evasion while evading energy sanctions.
- Election Meddling: Shor’s ops funneled USDT to bribe voters in Moldova’s 2025 polls, per leaks.
Chainalysis estimates Russia’s “shadow crypto economy” at $51B+ via A7A5 alone, with no-KYC exchanges enabling anonymous fiat ramps.
US and Global Countermeasures: Freezes and Future Crackdowns
The US Treasury has ramped up: redesignating Garantex in August 2025 for $100M+ in cybercrime facilitation, and sanctioning 13 Russian fintech firms in March for virtual asset services. FinCEN’s “red flags” guide banks on crypto sanctions risks, while blockchain analytics from Elliptic/TRM Labs trace $20B+ in suspicious flows.
Challenges persist: Crypto’s pseudonymity aids evasion, but traceability (e.g., IP links) exposes networks. Experts warn of limited scale—crypto’s $2T market cap can’t handle Russia’s $500B reserves—but it’s potent for targeted ops.
Implications: A Crypto Arms Race in Geopolitics
This billions-scale crypto evasion sustains Russia’s war economy, funds interference, and pressures allies to map countermeasures like enhanced blockchain monitoring. For crypto markets, it boosts USDT demand but invites regs; for firms, KYC/AML is non-negotiable.
As Putin champions Bitcoin, expect more state-crypto fusion—unless enforcers adapt faster. csis
