Russia’s financial isolation has produced a parallel system designed to keep money moving across borders despite Western sanctions, with the A7 network emerging as a key component. Founded in Kyrgyzstan and backed by Moscow, A7 operates through a web of shell companies stretching across Kyrgyzstan, Hong Kong, China, Turkey, the United Arab Emirates and several African countries. According to a recent report by OpenSource Center, produced with blockchain-analysis firm TRM Labs, the network processes payments and issues its own stablecoin, A7A5, allowing Russian capital to continue circulating through international financial channels.
The network took shape after the European Union and United States imposed successive restrictions following Russia’s invasion of Ukraine on 24 February 2022. Several Russian banks were removed from Swift, while sanctions were expanded to companies linked to Russia. In December 2023, then US President Joe Biden signed an executive order threatening secondary sanctions against financial institutions processing transactions connected to Russia’s military-industrial complex. The restrictions have limited Russia’s acquisition of dual-use military material and increased the cost of imports and exports, but Moscow has developed increasingly complex mechanisms to reduce the effects of its isolation.
At the centre of A7 is Ilan Shor, a Moldovan businessman who fled to Russia in 2023 after being accused of money laundering and embezzlement. Shor was involved in the diversion of nearly $1 billion from three Moldovan banks, an operation that eventually cost Moldova an amount equivalent to 12% of its gross domestic product. He arrived in Russia on a private jet belonging to oligarch Roman Abramovich. There, he became involved in developing mechanisms intended to help the Kremlin circumvent financial restrictions.
A7 began taking shape in spring 2024. Within months, it obtained licences from Russia’s central bank to operate as a distributor, broker and securities depository. Several satellite companies followed, including A7 LLC, A7-Agent LLC and A7 Technologies LLC, providing financial services as well as activities connected with wholesale trade in fuel, metals and commodities.
The network’s international reach is central to its operation. Companies formally registered in third countries and often managed by local businessmen provide access to foreign bank accounts and multiple currencies. According to TRM sources, A7-linked companies operate in at least 20 countries. These entities can make payments to foreign companies on behalf of Russian clients while obscuring the origin and destination of the money. An industry source described A7 as “a machine for creating companies”.
An investigation by the Financial Times found that more than $6.9 billion had moved through international banks including Standard Chartered, Citigroup and Deutsche Bank. Some of that money was used to purchase military equipment. A7 also developed an automated system capable of falsifying invoices and receipts by changing descriptions and product identification codes. Components used in drones, including optical transceivers and engines for unmanned aerial vehicles, could therefore appear in documentation as innocuous goods such as LED lights or hairdressing chairs.
Cryptocurrency provides another route. On 4 September last year, Shor told Russian President Vladimir Putin during a videoconference that A7 had processed between 1,500 and 2,000 transactions a day over 10 months. He said the company planned to pay 20 billion roubles, about €210 million, in taxes during 2025. Shor appeared alongside Piotr Fradkov, owner of Russia’s PSB bank, which is described as another key component of the structure.
Documents obtained by the independent Russian outlet Proekt and reported in April described how the mechanism works. A Russian buyer sends roubles to A7 in Kyrgyzstan through PSB, which provides infrastructure and loans. Intermediary companies then purchase cryptocurrency through Grinex, an exchange affiliated with A7. Associated companies in third countries, particularly in the Middle East and south-east Asia, convert the cryptocurrency into local currencies and pay the foreign seller, who sends the goods to Russia. The source says the FSB knows about the arrangement but does not intervene because members of the elite also benefit from imports of luxury goods.
To reduce the volatility associated with conventional cryptocurrencies, A7 issued A7A5, a stablecoin linked to the value of a traditional currency. Unlike major stablecoins, it was designed specifically to evade controls and sanctions and cannot be frozen, making intervention more difficult when authorities suspect illicit activity.
A7 is not the only channel connecting Russia to international finance. European banks that remained connected to Swift to preserve flows of Russian gas and oil have also provided continuing links. Gazprombank was not sanctioned until late 2024, while Raiffeisen Bank and UniCredit continued operating in Russia. Raiffeisen has faced allegations from Grizzly Research that more than $1 billion in commercial transactions, including some involving military material, passed through its accounts. The bank said: “We support the robustness of our compliance systems, which have been reviewed on numerous occasions.”
Cryptocurrency also has a legitimate everyday role for some Russians. Workers operating internationally can use stablecoins such as Tether’s USDT for peer-to-peer transfers without conventional banking intermediaries. One foreign worker told the newspaper that after Russia was excluded from Swift in 2022, stablecoins became useful for receiving a salary and converting it into roubles, although purchases directly with cryptocurrencies remain uncommon because few businesses accept them.
