The U.S. Treasury’s Office of Foreign Assets Control sanctioned multiple companies and individuals accused of using stablecoins to help Russia skirt international sanctions tied to its war in Ukraine on Aug. 14.
The designations target both Russian-linked businesses and foreign intermediaries alleged to have facilitated large-scale cross-border transactions for sanctioned entities.
The move highlights OFAC’s growing focus on stablecoins, which regulators say have become a preferred tool for sanctions evasion due to their speed, global reach, and relatively low transaction costs compared to traditional banking.
A7 LLC, the creator of the ruble-backed A7A5 stablecoin, was singled out for its reported role in transferring about $1 billion daily, according to blockchain analytics firm Elliptic.
A7 and its subsidiaries, A71 and A7 Agent, are majority-owned by Ilan Shor, who was convicted in 2017 for his role in the theft of $1 billion from three Moldovan banks, and Russian state-owned Promsvyazbank (PSB), which is a sanctioned entity due to its role in financing Russia’s defense sector.
Both Shor and PSB have been accused of undermining democratic processes abroad, including alleged vote-buying in Moldova’s 2024 elections.
Old Vector LLC, based in Kyrgyzstan, serves as the issuer of the A7A5 token. While Kyrgyzstan maintains a permissive regulatory framework for crypto issuers, U.S. officials allege the company’s activities were integral to Russia’s sanctions evasion network.
Mendeleev is also behind the “Cryptorouble” (RUBT) stablecoin and Exved, a cross-border payments platform designed for Russian exporters and importers operating under sanctions pressure.
Exved reportedly uses USDT to obscure Russian business ties in transactions worth tens of billions of rubles each month. Technical services to Exved are provided by Indefi Smartbank, backed by Russian oligarch Alexander Lebedev.
Kyrgyzstan-based Grinex, described by Elliptic as Garantex’s successor, was also sanctioned for facilitating trades in A7A5 and USDT.
The action reflects OFAC’s increasing scrutiny of cryptocurrency in sanctions enforcement. In recent years, the agency has expanded its Specially Designated Nationals (SDN) list to include a growing number of digital asset addresses, enabling exchanges, payment processors, and financial institutions to block transactions linked to sanctioned actors.
Elliptic said it has updated its blockchain monitoring tools so clients can detect and block any transactions tied to the sanctioned wallets and entities. Regulators have signaled they will continue targeting stablecoin-based systems that bypass the traditional financial sector, viewing them as a growing threat to sanctions compliance.
