US Slams Sanctions on Ruble-Backed Stablecoin A7A5—Is Tether Next in the Crosshairs?

The US Treasury just dropped a hammer on A7A5—the controversial ruble-pegged stablecoin—in its latest sanctions salvo. Crypto markets are bracing for ripple effects.

Geopolitical chess or financial overreach? Either way, Washington's move signals a new front in the crypto cold war.

Behind the headlines: While A7A5 wasn't exactly a market heavyweight, the precedent could send shivers through Tether's legal team. The king of stablecoins has danced through regulatory gray areas for years—but this escalation changes the game.

Market watchers note the irony: decentralized tech getting kneecapped by centralized power plays. Meanwhile, traders are doing what they do best—buying the rumor, selling the news, and charging 2% spreads while pretending it's 'market making.'

Ruble-Backed Stablecoin A7A5 Plummets; Will Tether Be Affected?

This MOVE against A7A5 followed similar sanctions from the UK in May and the EU in July. It highlights a new front in the US effort to stop Russia from using cryptocurrencies to bypass financial sanctions.

After the announcement, the price of the A7A5 dropped by roughly 13%, from about $0.0124 to $0.0105.

Despite an unusual drop in the value of a Russian ruble-backed stablecoin, confidence in other stablecoins has remained unshaken. 

Even as transaction records linked to the recent incident showed extensive use of Tether (USDT), the stablecoin giant has not faced significant backlash.

The A7A5 Stablecoin: Origins and Operations

A7A5 launched in Kyrgyzstan in 2025 and quickly became the top ruble-backed stablecoin. On-chain analytics firm Elliptic reports that the token has handled up to $41.2 billion in transfers since its launch. Its daily trading volume exceeds $1 billion, and its market cap reached $521 million.

A7 LLC, the creator, co-owns the company with Russia’s state-owned bank, Promsvyazbank (PSB). Interestingly, PSB was already on the OFAC sanctions list. The token’s issuer, Old Vector LLC, is also based in Kyrgyzstan and is now facing sanctions.

A7 LLC co-owns the company with Russia’s state-owned Promsvyazbank (PSB), which already appears on OFAC’s sanctions list. Old Vector LLC, the token’s issuer in Kyrgyzstan, also faces sanctions. 

A7 LLC has connections to Moldovan businessman Ilan Shor, who faced fraud and election interference charges. Exchanges linked to Russia, including Meer and Grinex, provide most of the token’s liquidity. A7A5 also trades on TRON and ethereum blockchains.

The Rise of A7A5 After Garantex Takedown

In March 2025, the US government and international law enforcement disrupted Garantex, a crypto exchange already on the OFAC list for facilitating illicit transactions. 

Authorities seized the exchange’s website and froze $26 million in Tether (USDT). The Garantex takedown spurred the growth of A7A5. Many Russian users sought a more secure option than easily frozen USDT. Grinex, a crypto exchange believed to have replaced Garantex, became a key hub for A7A5 trading.

OFAC has also added Garantex co-founder Sergey Mendeleev to its sanctions list. Entities connected to Mendeleev also received sanctions. These include Exved, a cross-border payment platform for Russian importers and exporters. 

Exved uses USDT to hide its ties to Russian users. Another sanctioned entity is Indefi Smartbank, a crypto service provider for Exved and Grinex.