The UK Government today announced a series of new technical measures targeting Russia-linked cryptocurrency exchanges – in a bid to prevent sanctions evasion.
Ministers said they would go after the notorious Kremlin-backed ‘A7 network’, which is thought to be diverting billions of dollars into Vladimir Putin’s war machine.
The scheme, illicitly facilitated through Kyrgyzstan’s financial systems, is allegedly responsible for financing military procurement and processing funds from the sale of oil to fund Russia’s war economy.
Foreign secretary Yvette Cooper said: “If the Kremlin thinks it can evade our sanctions by hiding behind crypto networks and shadow financial systems, it is gravely mistaken.
“The UK is adapting and strengthening our approach to target the evolving tactics Russia is using to evade restrictions. We are going after the infrastructure that underpins its war economy at the same time as Ukraine is increasing the pressure on Russia on the battlefield.”
She added: “We are tracking down and shutting off the financial lifelines that sustain Putin’s war machine. There will be no safe havens for those enabling Russia’s aggression.”
The A7 network claimed to have moved more than $90 billion last year – equivalent to roughly half of Russia’s yearly military expenditure.
Today’s package of 18 designations directly targets Russia’s illicit financial infrastructure used to move funds, procure goods, and sustain its war.
New measures also hit key A7-linked individuals. The gang is using a Kyrgyz bank suspected of facilitating payments for the network, alongside a major global cryptocurrency exchange that we suspect has channelled over $1.5 billion back into the Kremlin’s hands. Three Georgian companies operating Russia focused exchanges seeking to evade sanctions are also targeted.
The A7 network operates a ruble-backed stablecoin – a type of cryptocurrency designed to maintain a steady value by being pegged to some external asset – called A7A5, where each token is backed by the Russian ruble, making it a tool for cross-border payments and trade.
It was identified last year by the National Crime Agency (NCA) as a conduit for money laundering, set up by sanctioned Russian-Moldovan oligarch Ilhan Shor.