UK Joins US in Targeting Crypto Networks Propping Up Putin

In a statement on August 20, UK officials said Russia has increasingly relied on Kyrgyz financial institutions and opaque crypto networks to funnel money offshore, supporting military procurement despite sanctions.

Among those named were Kyrgyzstan’s Capital Bank and its director, Kantemir Chalbayev, identified as key players in helping Moscow access global markets. The measures also targeted Grinex, a Russian-founded crypto exchange described by regulators as a direct successor to the sanctioned platform Garantex, which had previously been blacklisted by the US and EU.

The sanctions extend to several firms tied to the A7A5 stablecoin, a ruble-backed digital token that has become a central tool for Russia’s sanctions evasion. Issued by Kyrgyz firm Old Vector and backed by deposits at sanctioned lender Promsvyazbank, A7A5 has processed more than $9.3 billion in transactions in just four months, according to a Chainalysis report.

The report highlighted that the token’s trading is concentrated during weekdays and primarily circulates within a closed ecosystem of Russia-linked financial services. Its main trading venue has been Grinex, with liquidity traced directly back to Garantex, exposing a clear on-chain connection between the two exchanges.

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UK Sanctions Minister Stephen Doughty stressed the government’s determination to clamp down on Russia’s attempts to bypass restrictions. “If the Kremlin thinks they can hide their desperate attempts to soften the blow of our sanctions by laundering transactions through dodgy crypto networks – they are sorely mistaken,” Doughty said. “These sanctions keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest.”

The move mirrors recent steps by the US Treasury’s Office of Foreign Assets Control (OFAC), which has also sanctioned Russian entities linked to crypto-based evasion efforts. With both the UK and US intensifying their focus on blockchain activity tied to Moscow, regulators are signaling that crypto assets like A7A5 are now a major battleground in the wider sanctions war against Russia.

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