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Russia has quietly developed a crypto-fueled network of payments systems that’s helped it evade Western sanctions over its war in Ukraine.
That assessment comes from blockchain analytics firm Chainalysis, which said it believes Russia had created a “shadow crypto economy” in the years following its invasion of Ukraine in order to sidestep financial punishment by the US and its allies.
The report highlighted one crypto token in particular tied to Russian businesses trying to trade under the radar. The coin, called A7A5, has been used to process over $51.1 billion worth of transactions from the time it was issued through the end of July, per Chainalysis data.
The crypto, which is backed by the Russian ruble, was transacted on a “fairly small subset” of crypto exchanges, many of which had “notable” ties to Russia, Chainalysis researchers said.
Garantex, a crypto exchange with heavy ties to Russia on which the A7A5 was largely traded, was sanctioned by the US in 2022.
Grinex, which was created by Garantex employees in 2024 to bypass sanctions, according to the US Treasury Department, was also sanctioned by the US this week.
Old Vector, the Kyrgyzstan-based issuer of A7A5, which is backed by Russia’s state-owned Promsvyazbank, has also been sanctioned.
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A7A5 was largely traded during the workweek, with transaction volumes collapsing over the weekend. That suggests the cryptocurrency was used primarily for business exchanges, Chainalysis said.
“These trading patterns suggest that A7A5 is primarily being used by businesses operating Monday through Friday, which would align with Russia’s legislative goals of facilitating cross-border transfers for Russian businesses via cryptocurrency,” the report said.
Transactions involving A7A5 were concentrated during the business week, according to Chainalysis
Chainalysis
The firm pointed to recent updates to Russia’s crypto legislation in the past year. The nation recently legalized crypto mining and cross-border crypto payments, a move that was likely a “deliberate effort to build alternative financial infrastructure” in response to tariffs, Chainalysis said.
“The emergence of the A7A5 network sanctioned today further illustrates how Russia is operationalizing these alternative payment rails,” the report said. “Backed by sanctioned Russian institutions, A7A5 is providing a new, crypto-native avenue to bypass the ever tightening sanctions against Russia. Time will tell if A7A5 will expand to a larger retail market,” it added.
Russia has embraced alternative assets, like gold and crypto, as a means to bypass sanctions since invading Ukraine in 2022. In July, Russia’s top financial regulator said that the nation’s cross-border transactions were on the rise with countries in the Middle East, Southeast Asia, and Central Asia. The nation’s share of global trade in crypto and gold have also increased, he added.
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