The UK government has imposed new sanctions on entities tied to Russia’s use of cryptocurrencies to bypass Western restrictions.
The UK named Kyrgyzstan’s Capital Bank and its director, Kantemir Chalbayev, as key players in the scheme used to purchase military goods on Moscow’s behalf.
Meanwhile, these sanctions also covered Grinex, a Russian-founded crypto exchange viewed as the successor to the blacklisted platform Garantex.
Alongside Grinex, the UK targeted Meer Exchange and several firms tied to the ruble-backed token A7A5, which has quickly become central to Moscow’s attempts to sidestep restrictions.
The UK government described the latest measures as part of a broader campaign to limit Russia’s financial options since the start of its invasion of Ukraine.
UK Sanctions Minister Stephen Doughty said:
“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. 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 A7A5 token, issued by the Kyrgyz company Old Vector and backed by deposits at sanctioned Russian lender Promsvyazbank, has processed more than $9.3 billion in transactions within four months.
According to the firm, Grinex has been the asset’s primary trading venue and is mainly used by businesses as an internal medium of exchange.
Meanwhile, the token’s early liquidity can be traced directly back to Garantex, creating a clear on-chain connection between the two exchanges.
