U.S. Treasury Sanctions Kyrgyzstan-Based Firms and Stablecoins for Russian Sanctions Evasion

The U.S. Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on multiple companies and individuals accused of using stablecoins to facilitate Russian sanctions evasion. The action, announced on August 14, targets both Russian-linked businesses and foreign intermediaries involved in cross-border transactions for sanctioned entities.

OFAC's MOVE underscores growing regulatory scrutiny of stablecoins, which authorities say have become a preferred tool for circumventing sanctions due to their speed, global reach, and lower costs compared to traditional banking channels.

A7 LLC, creator of the ruble-backed A7A5 stablecoin, was specifically cited for processing approximately $1 billion daily. The company and its subsidiaries are majority-owned by convicted Moldovan financier Ilan Shor and Russian state-owned Promsvyazbank, both already under sanctions for financial crimes and undermining democratic processes.

Kyrgyzstan-based Old Vector LLC serves as the issuer of the A7A5 token, operating within the country's permissive regulatory framework. The designations highlight how digital assets are increasingly being weaponized in geopolitical conflicts.