Russia is increasingly using crypto-assets (for an explanation of the terminology used in the text, see the table) to make cross-border payments outside the traditional financial system. These complement complexmechanisms for circumventing sanctions, which also involve traditional financial institutions, networks of intermediaries and cash settlements. This facilitates Russia’s trade, particularly in the area of dual-use goods, such as drone parts, electronics and sensitive technologies, e.g. relating to servers.

At the same time, the public nature of many blockchain ledgers enables financial flows to be monitored by state institutions and private analytical firms. Stablecoin issuers also have mechanisms in place to freeze funds belonging to sanctioned entities. In response, Russia is developing increasingly sophisticated methods to conceal financial flows.

The scale and modus operandi of Russia

According to estimates by TRM, the vast majority of sanction-related crypto-asset volume in 2025–totalling approximately $158 billion–was linked to Russia. This included the A7A5 stablecoin, the A7 network, and the Garantex and Grinex exchanges. The high figure was partly due to the A7 network being made subject to sanctions and the more effective identification of addresses associated with it.

Russia’s cryptocurrency infrastructure is centralised and closely linked to the state. The A7 network plays a key role, being used for cross-border payments and fund transfers by entities from third countries, including those in Central and South-East Asia. The associated A7A5 stablecoin can be exchanged for other cryptocurrencies, such as RUBx, or local currencies outside Russia. Blockchain transactions enable rapid settlements, whilst the use of stablecoins helps to mitigate the risks associated with exchange rate volatility. According to the operators, over $90 billion flowed through the A7 network in 2025.

Exchanges and operators based in Russia-friendly countries, particularly in Kyrgyzstan, Georgia, and the UAE – including Grinex, Rapira, and Exmo – are also a key part of this ecosystem. They are supported by over-the-counter (OTC) brokers and virtual asset service providers (VASPs), which facilitate the exchange of stablecoins for local currencies. These entities often share infrastructure and carry out mutual fund transfers.

Russian entities are also increasingly using privacy-enhancing cryptocurrencies, such as Monero, non-custodial wallets, and are applying techniques to obscure transaction flows, including frequent address changes, wallet rotation and transfers between different blockchains. False identities and tools utilising artificial intelligence are also becoming increasingly significant.

Actions by the sanctions coalition 

The response from the G7+ countries – primarily the EU, the US and the UK – was to gradually extend sanctions from individual entities to entire financial networks. The US and the UK imposed restrictions on the Russian exchange Garantex in 2022, with the EU following suit in February 2025. In the following years, the US imposed restrictions on entities including the cryptocurrency mining company BitRiver, wallets linked to arms dealer Jonatan Zimenkov, and the exchanges Bitpapa, Crypto Explorer, and AWEX.

From 2025, complete financial ecosystems became the main target of sanctions. In August 2025, the US imposed sanctions on the A7A5 stablecoin system, including the company A7, the entities A71 and A7 Agent, the Kyrgyz issuer Old Vector, and the Grinex exchange, which had taken over some of Garantex’s functions. In October 2025, the EU took similar action, additionally banning all transactions related to A7A5. The UK imposed sanctions on Grinex, Old Vector and other entities involved in A7A5 trading, and in May 2026 extended the restrictions to the A7 network, including the Exmo, Rapira, Bitpapa, and HTX exchanges. As part of the 20th sanctions package of April 2026, the EU also introduced a ban on transactions with Russian and Belarusian cryptocurrency service providers, a ban on trading the RUBx stablecoin and the digital rouble, and a ban on supporting the development of Russian cryptocurrency infrastructure. The draft of the 21st sanctions package from June 2026 provides for a further extension of the restrictions to entities from third countries that facilitate the circumvention of sanctions.

At the same time, law enforcement efforts are being stepped up. Within the EU, particular attention has been focused on Binance. In 2022, the Dutch regulator imposed a fine on the exchange for breaching anti-money laundering (AML) requirements, and in 2025, the French public prosecutor’s office launched an investigation covering potential circumvention of restrictions by Russian users. In December 2024, British authorities, with US support, dismantled the “Smart” and “TGR” networks, linked to Garantex and used for money laundering and circumventing sanctions. Eighty-four people were arrested and over 20 million pounds in cash and cryptocurrencies were seized. In March 2025, the US, Europol and the authorities of the Netherlands, Germany, Finland and Estonia carried out an operation against Garantex, freezing over 26 million dollars and seizing the exchange’s infrastructure, including its servers.

Challenges

Despite these measures, sanctions remain largely reactive. When one channel is closed down, another often emerges; an example of this was seen in the partial transfer of business from Garantex to Grinex. Russian cooperation with entities from countries with weaker AML oversight, particularly in Central Asia, the Middle East and Africa, remains a problem.

Further limitations stem from the shortcomings of the global regulatory system. The standards of the Financial Action Task Force (FATF), an international intergovernmental organisation charged with combating money laundering, have extended AML requirements to providers of virtual asset services; however, their implementation remains voluntary and uneven. Particular difficulties arise in the areas of decentralised finance (DeFi) and exchanges, blockchain bridges and transaction mixers, where there is often no entity that can be subject to sanctions or required to implement AML procedures. Similar challenges apply to non-custodial wallets, OTC brokers and peer-to-peer (P2P) settlements operating outside the regulated financial sector. Furthermore, privacy-enhancing cryptocurrencies, such as Monero, make it significantly more difficult to track the flow of funds.

While the blockchain remains largely transparent, linking a specific address to an individual or organisation continues to be a challenge, particularly in the case of non-custodial wallets, multi-layered structures, front companies and transfers across multiple blockchain networks. In the future, this problem may be exacerbated by the use of artificial intelligence to automatically generate new addresses and multi-layered transfer schemes.

Limited capabilities for detecting financial crime involving crypto-assets remain a challenge. Whilst the US and the UK have well-developed expertise in this area, only some EU countries possess such capabilities, including France, Germany and the Netherlands. Staff shortages in blockchain analysis are a problem. Support is provided by the European Centre for Financial and Economic Crime (EFECC) at Europol and the  Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), which will be fully operational from 2028.

Recommendations

The specific nature of the crypto-asset market and new technologies pose a major challenge in combating Russia’s circumvention of sanctions. Although Western restrictions are becoming increasingly effective against centralised entities, their effectiveness remains limited against decentralised financial networks. Therefore, G7+ countries should more frequently impose restrictions on entire ecosystems, targeting exchanges, brokers, stablecoin issuers, banks and payment operators.

Given the high adaptability of cryptocurrency infrastructure, it is essential for the authorities of G7+ countries to map entire financial networks and how they operate, including consolidation and liquidity mechanisms, and to identify intermediaries. At the same time, countries should invest in advanced blockchain analytics, develop public-private partnerships and strengthen investigative capabilities for monitoring digital flows.

It is also essential to use diplomacy to engage in cooperation with countries acting as cryptocurrency hubs, i.e. in Central Asia, and to provide regulatory support and financial assistance; and, in the event of a systemic lack of cooperation, to impose restrictions on specific entities and jurisdictions that facilitate the circumvention of sanctions. At the global level, it is essential to implement FATF recommendations more effectively and extend transparency requirements to the DeFi sector, P2P services and cross-chain solutions.

Although Poland has tightened its regulations on the implementation of sanctions, the act regulating the crypto-asset market remains the subject of political dispute between the government and the president. It would be advisable to enhance the capacity of national authorities to investigate financial crimes involving cryptocurrency transactions.