UK sanctions A7 network that moved $90 billion for Russian military spending

The UK has sanctioned the A7 network, a Kremlin-backed payments system that moved $90 billion last year, half of Russia’s military spending, by routing funds through forged documents and both traditional banking and crypto channels. For institutional investors, the case reveals how sanctions evasion networks now exploit gateways between fiat rails and blockchains, forcing platforms and issuers to adopt stricter screening even as the ruble stablecoin A7A5 collapses.

• A7 moved $90 billion in the prior year, roughly half of Russia’s annual military spending, using forged shipping documents and shell companies.
• On-chain A7 activity exceeded $166 billion according to TRM Labs, while the ruble stablecoin A7A5 saw average daily turnover collapse 96% from July 2025 to June 2026.
• The network funneled $6.9 billion through international banks unaware of A7’s identity, then converted proceeds into Tether and the A7A5 stablecoin to obscure the chain of custody.

• $90B A7 network’s claimed annual transfers, roughly half Russia’s military budget
• 96% Collapse in A7A5 daily volume from peak July 2025 to June 2026
• $6.9B Bank-rail flows through A7 using forged documents, per leaked files

On May 26, the UK announced 18 designations targeting the A7 network, a Kremlin-backed system designed to bypass Western sanctions and finance military procurement. According to reporting by the Financial Times (FT), leaked documents show the network funneled $6.9 billion through international banks using forged shipping documents and shell companies, while simultaneously routing funds through Tether’s USDT and a sanctioned ruble stablecoin called A7A5. The dual-channel approach, mixing traditional correspondent banking with crypto intermediaries, marks a shift in how state-backed sanctions evasion operates: the weak point is no longer banking or crypto alone, but the conversion gateways where the two intersect.

International banks processed $6.9 billion without knowing A7’s identity

The leaked documents reveal that correspondent banks in multiple jurisdictions executed A7 transactions using forged paperwork, unaware of the network’s Kremlin links or sanctions designation. The Russian defense finance institution Promsvyazbank (PSB) and Moldovan businessman Ilan Shor created A7 to serve Russian companies cut off from regular cross-border finance channels.

The $6.9 billion figure represents bank-rail flows alone and excludes the much larger volumes that moved on-chain once proceeds reached crypto intermediaries.

UK Foreign Secretary Yvette Cooper stated in the government announcement that A7 claimed to have moved over $90 billion in the previous year, equivalent to roughly half of Russia’s yearly military expenditure. The network also involved a Kyrgyzstan-registered bank and a major global cryptocurrency exchange suspected of channeling over $1.5 billion to Moscow, both now designated.

A7A5 stablecoin collapses as sanctions freezes conversion routes

The ruble-pegged A7A5 token, designed to reduce dependence on issuer-level freezes, initially transferred $102 billion in its first year of operation across 251,000 transactions. However, international sanctions have strangled its utility: average daily turnover fell to just $24.3 million in June 2026, a 96% decline from the July 2025 peak.

PSB chairman Pyotr Fradkov disclosed in August that A7A5 had recorded cumulative turnover of approximately $140 billion since launch, but the currency became difficult to convert into liquid stablecoins once the network faced restrictions.

Every transaction settles on a public blockchain, traceable and permanent.

Ari Redbord, TRM Labs, writing for ACAMS

The distinction between on-chain metrics matters here. TRM Labs found A7-related on-chain volume exceeded $166 billion, but roughly $35 billion represented circular transactions between A7 and related actors evading sanctions, rather than genuine settlements. This inflates the apparent size of the actual sanctions-busting operation.

TRM traced $65 million to Iran’s Islamic Revolutionary Guard Corps, $5 million to Hamas

Blockchain investigators traced at least $65 million in a single A7 address to Iran’s Islamic Revolutionary Guard Corps, and approximately $5 million to Hamas, showing the network’s role in funding designated entities beyond Russia.

TRM also identified at least $590,000 in proceeds from the BTCTurk and Woo X cryptocurrency exchange hacks, stolen by North Korean state hackers, flowing into A7-controlled wallets through intermediaries. These findings underscore how sanctions-evasion networks aggregate illicit flows from multiple state actors and criminal sources.

Regulators tighten stablecoin controls while mainstream issuers retain freeze capability

The Financial Action Task Force (FATF) flagged ruble-pegged and jurisdiction-resistant stablecoins as a “significant and emerging risk” in July, prompting regulators to demand stronger wallet screening and blockchain analytics.

However, mainstream stablecoins remain traceable and subject to issuer controls: Tether froze $344.2 million in USDT linked to Iran’s central bank in April, and less than 0.5% of all stablecoin transactions in 2025 were tied to illicit activity. A7A5, by contrast, was explicitly designed to minimize issuer-level freezes, making it harder to halt funds once they entered the network.

The UK’s approach targets not the stablecoin asset class as a whole, but the infrastructure gateways where fiat and crypto channels connect.

The unresolved question is whether offshore cryptocurrency exchanges, particularly those operating from jurisdictions like Kyrgyzstan or Georgia, will implement the screening standards needed to close these conversion points, or whether Russian-linked entities will simply migrate to other platforms.

The CCS read. We see A7 not as a crypto problem but as a hybrid finance problem: sanctions work only when both rails are blocked. Mainstream stablecoin issuers can freeze on command, but unregulated off-ramps and peer-to-peer conversion networks do not. The real risk for institutional holdings is not the token itself, but whether regulators will force custody and exchange platforms to block inflows from designated networks in real time, effectively treating on-chain analytics as a pre-transaction compliance requirement rather than a post-hoc forensic tool.

The UK designated 18 entities on May 26, and the European Union already targeted A7A5 and the digital ruble in its 20th sanctions package, and the U.S. Treasury’s sanctions have included A7 as well as Old Vector. Watch whether U.S. regulators will impose blanket restrictions on A7-linked wallet addresses on major exchanges, or whether they will focus enforcement on the Kyrgyz bank and offshore crypto exchange operators themselves, a narrower approach that could allow smaller or decentralized platforms to remain conduits.