How Russia Evades Sanctions Using Cryptocurrencies?

The West attempted to cut Russia off from the global financial system. Assets were frozen, the largest banks were sanctioned, and some were expelled from the SWIFT system. However, the Kremlin responded by building alternative payment channels. Today, one of the most interesting elements of this infrastructure is A7A5, a stablecoin linked to the ruble, whose cumulative turnover is already approaching 140 billion dollars.

On February 24, 2022, the Russian army launched a full-scale invasion of Ukraine. The West's response came very quickly, but it was not limited to arms supplies or political declarations.

One of the most important fronts of this war has become money.

The United States, the European Union, and their allies began freezing Russian assets, limiting access to Western capital, and imposing sanctions on banks. Some Russian financial institutions were also disconnected from SWIFT, the global communication system used by banks for international settlements.

The goal was simple: to make sending money abroad or servicing international trade significantly more difficult for Russia. However, when the main doors are closed, someone starts looking for a back entrance.

SWIFT is often portrayed as the financial bloodstream of the world, but contrary to popular simplification, it does not actually transfer money. It is rather an extremely secure communicator through which financial institutions exchange the information needed to execute transactions.

Thus, lack of access to it does not make a bank cease to exist, but complicates its contact with the world significantly.

In the first wave of sanctions, not all Russian banks were expelled from SWIFT. Among those left off the initial list were Sberbank and Gazprombank. The reason was very mundane: Europe was still buying Russian oil and gas, and a significant portion of payments for these commodities went through these institutions.

Total financial isolation of Russia could therefore also hit the countries imposing sanctions. This illustrates the fundamental problem with economic restrictions. Sanctions can be extremely painful, but the global financial system is a network of interconnected vessels.

Just a few years ago, the relationship between Russian authorities and cryptocurrencies could be described as at least cool. However, the war and problems with international payments changed the economic calculus.

In July 2024, Russia adopted regulations allowing exporters and importers to use cryptocurrencies for cross-border settlements under a special experimental legal regime. The Bank of Russia later openly admitted that enterprises were testing digital assets and cryptocurrencies as alternative payment channels.

Finance Minister Anton Siluanov stated in December 2024 that Russian enterprises had already begun using Bitcoin and other digital currencies in international trade.

The most popular stablecoins, such as USDT or USDC, try to maintain a value close to one dollar. A7A5 does something similar, but its reference point is the Russian ruble.

The token appeared at the beginning of 2025. Its formal issuer is a company registered in Kyrgyzstan called Old Vector, while the U.S. Department of the Treasury links the entire system to the Russian settlement platform A7 and the sanctioned bank Promsvyazbank, or PSB. OFAC describes A7 as a cross-border payment platform used to circumvent sanctions.**

Instead of trying to send rubles via a classic transfer from a Russian bank to a foreign institution, their value can be transferred to the blockchain. The tokens can then be sent to another entity, exchanged for another digital asset, and only later converted into the traditional currency needed to settle the transaction.

On August 10, 2026, Piotr Fradkow, the president of the Russian PSB, stated that the cumulative turnover of A7A5 since its launch had approached 140 billion dollars.

It is important to note: this refers to turnover, not the capitalization of the token or 140 billion dollars lying in a single digital vault.

Fradkow also reported that the A7 infrastructure serves about 15,000 regular business clients and processes up to 2,000 payments daily. According to data presented by A7, about 90 percent of settlements are expected to involve Asian countries, primarily China.

A7A5 has thus ceased to be a curiosity at the intersection of cryptocurrencies and geopolitics. It has become an element of real financial infrastructure. However, the stablecoin alone is not enough. The cryptocurrency needs to be bought, sold, and exchanged somewhere.

In April 2022, the United States sanctioned the Russian exchange Garantex.

According to the U.S. Department of Justice, the platform processed cryptocurrency transactions worth at least 96 billion dollars since April 2019. U.S. authorities accused it of, among other things, involvement in money laundering, handling funds from ransomware, and violating sanctions.

In March 2025, a blow occurred. U.S. authorities seized the domains used by Garantex. Germany and Finland seized servers, and over 26 million dollars in assets related to the exchange's activities were frozen. Its administrators also faced charges.

It might have seemed that one of the most important Russian cryptocurrency channels had just been shut down. The problem is that shortly afterward, Grinex appeared on the scene.

According to OFAC, this was not a random new exchange. The U.S. Department of the Treasury claims that the Grinex infrastructure was created by people associated with Garantex after the operation of the authorities, and customer deposits began to be transferred to the new system.

Moreover, some customers who lost access to their funds after the blow to Garantex were reported to have received their equivalent in A7A5. This is almost a textbook example of the problem regulators face. You close an exchange. Another one emerges. It’s the Russian hydra.

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