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Kremlin-backed cryptocurrency transfers $6 billion despite US sanctions

Kremlin crypto coin moves $6 billion despite sanctions

A Kremlin-supported cryptocurrency, A7A5, has transferred $6 billion since August, effectively evading U.S. sanctions. It reveals the challenges faced by Western measures aimed at limiting Russian financial activity.

  • Crypto coin moves $6 billion
  • Evades U.S. sanctions
  • More than 80% of tokens destroyed
  • New wallet created for transactions
  • Part of expanding A7 payment system
  • Promsvyazbank backs the coin
  • A7 claims $86 billion moved
  • Operators emphasize transparency

A Kremlin-backed cryptocurrency stablecoin, A7A5, has successfully transferred over $6.1 billion across borders since August 2025, despite U.S. and Western sanctions targeting its operators and associated networks.

A7A5’s Sanctions Evasion Strategy

  • Over 80% of A7A5’s tokens were destroyed and re-minted to sever connections with the sanctioned Kyrgyz-based crypto exchange Grinex.
  • Grinex was created by former employees of Garantex, a previous Russian crypto exchange that faced extensive sanctions and law enforcement action for illicit activities.
  • The newly minted tokens operate from a fresh wallet yet continue transaction patterns similar to the original, peaking during Moscow’s business hours, indicative of a coordinated scheme.
  • A7A5 is officially recognized in Kyrgyzstan as a digital financial asset, enabling formal use for cross-border trade transactions.[1][2][3][4]

Ties to Russian Financial Institutions and Officials

  • A7A5 tokens are backed by Promsvyazbank (PSB), a major state-owned Russian bank under U.S., UK, and EU sanctions for supporting Russia’s military-industrial complex.
  • Promsvyazbank owns 49% of the A7 payment network, integral to the A7A5 stablecoin ecosystem, while the remaining stake is linked to Ilan Shor, a Moldovan oligarch wanted for large-scale fraud.
  • The A7 network has processed over $86 billion in transactions within the last ten months, fueled by loans from Russian state-owned banks, supporting Moscow’s efforts to bypass Western financial restrictions.[5][4][1]
  • Grinex and its predecessor Garantex were sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and Britain for facilitating sanctions evasion via cryptocurrency.
  • The U.S. and UK have designated both exchanges and connected entities along with the Kyrgyz companies Old Vector and Grin LLC, which helped operate the A7A5 token ecosystem.
  • The European Union is actively considering imposing sanctions on A7A5 to curb Russian crypto flows into European markets.
  • Kyrgyzstan, which hosts A7A5’s issuer Old Vector, is regarded by Russia as a “friendly jurisdiction.” The Kyrgyz government maintains that sanctions on its banks are politicized and insists on transparency and audits to prove compliance.[6][7][8][9][10]

Implications and Outlook Kremlin-backed cryptocurrency

  • The A7A5 case illustrates Russia’s evolving strategy to counter Western sanctions by deploying blockchain-based payment rails backed by state-linked banks.
  • Despite public sanctions and operational disruptions, the network quickly adapts by reissuing tokens and maintaining transactional flow, demonstrating resilience and sophisticated sanction circumvention.
  • Western authorities face significant challenges monitoring and disrupting such crypto-native financial networks due to their decentralized and cross-jurisdictional nature.
  • A national crypto audit planned by the Russian Central Bank in early 2026 aims to assess holdings and transactions but may be hampered by these evasive mechanisms.[2][11][12][1]
Rachel Patel

Rachel Patel

Senior News Editor

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Rachel Patel is a senior news editor and journalist specializing in political journalism and digital media. With over seven years of professional experience, she is recognized for her accuracy, source verification, and audience-focused reporting approach. Rachel earned her M.S. in Journalism & Media Studies from Stanford University (2018), where she developed expertise in media ethics, political communication, and digital storytelling. Her career has centered on bridging traditional political reporting with the fast-paced world of online journalism. She has contributed to major global media outlets, analyzing how digital platforms — from YouTube and Reddit to TikTok and Bluesky — shape political narratives, influence public opinion, and redefine news consumption. Now based in Berlin, Germany, Rachel serves as a Senior News Editor at Faharas NET, leading coverage on digital politics, media literacy, and social communication trends in the modern information landscape.

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Editorial Timeline

Revisions
— by Elena Voren
Add SEO improvements
— by Kamar Mahmoud
Added new relevant secondary sources
— by Kamar Mahmoud
Initial publication.

Correction Record

Accountability
— by Kamar Mahmoud
  1. - Added detailed sanctions context and international reactions.
  2. - Included Promsvyazbank ownership and ties to state institutions.
  3. - Highlighted Grinex’s connection to Garantex and sanctions history.
  4. - Emphasized Kyrgyzstan’s regulatory role and strategic importance.
  5. - Quantified A7 network transaction volume with latest data.
  6. - Presented operational token deletion and re-minting tactic clearly.
  7. - Stressed EU’s consideration of additional sanctions on A7A5.
  8. - Used shorter, clear sections with precise, factual sentences.
  9. - Incorporated references from credible reports and official sources.
  10. - Explained broader implications for sanctions enforcement complexity.

FAQ

Why is A7A5 significant in this context?

It highlights how Russia can circumvent financial sanctions.

How are they avoiding U.S. sanctions?

By destroying and recreating tokens to sever links.

What role does Promsvyazbank play?

It backs the token with roubles and supports the network.