The UK imposes heavy sanctions on the Russian encryption network! Targeting A7A5 ruble stablecoin and Grinex exchange.

On August 20, the UK government announced a new round of sanctions against several cryptocurrency and financial entities suspected of helping Russia evade Western sanctions and fund its military operations. This action targets networks associated with the A7A5 ruble stablecoin, the Russian cryptocurrency exchange Grinex, and Kyrgyz Financial Institutions, aiming to cut off the Kremlin’s channels for transferring funds through digital assets.

Sanction Focus: Kyrgyz Capital Bank and Grinex

The UK has listed Kyrgyz Capital Bank and its president, Kantemir Charbaev, as key figures in Russia’s procurement of military supplies.

At the same time, the UK has placed Grinex on its sanctions list, viewing the platform as the successor to Garantex, which has been blocked by the US and the EU.

Background: Garantex has been sanctioned for ignoring Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations.

Grinex Positioning: Publicly claims to be an alternative to Garantex and has become an important channel for the transfer of funds in Russia.

A7A5 Ruble stablecoin becomes a key target

The sanctions list also includes several companies related to the A7A5 coin.

Issuer: Kyrgyz Company Old Vector

Asset-backed: Supported by deposits from the sanctioned Russian bank Promsvyazbank.

Transaction scale: Over 9.3 billion dollars processed within 4 months.

Purpose: Mainly circulates within the financial services ecosystem related to Russia, serving as an internal settlement tool for enterprises.

According to the Chainanalysis report, the early liquidity of A7A5 can be traced back to Garantex, showing a clear on-chain financial connection between the two exchanges.

UK: Cut off the funding chain for Russia’s “war fund”

UK sanctions minister Stephen Doughty said: “If the Kremlin thinks it can evade sanctions through opaque encryption networks to launder money, it is very much mistaken. We will continue to pressure Putin at critical moments and combat the illegal networks that fund his war chest.”

The British government emphasized that this move is part of a broader action to limit Russia’s financial options since its invasion of Ukraine, and is in line with the latest sanctions actions of the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

International Cooperation and Subsequent Impacts

This sanction highlights the coordination of Western countries in the enforcement of cryptocurrency sanctions:

United States: OFAC has recently taken action against Russian-related encryption entities.

EU: Continuously updating the sanctions list, covering Virtual Asset Service Providers (VASP)

Potential Impact:

1. Russia may look for new offshore encryption channels.

2. Western regulatory agencies will strengthen cross-border monitoring of stablecoins and exchanges.

3. The liquidity of A7A5 and other ruble-pegged tokens may decline sharply.

Conclusion

The UK’s recent sanctions directly target the core network of Russia’s use of encryption to evade sanctions, particularly the A7A5 ruble stablecoin and the Grinex exchange. As international regulatory cooperation strengthens, Russia’s space for cryptocurrency capital flow will be further tightened, suggesting that future sanctions against stablecoins and cryptocurrency trading platforms will be more targeted and precise.