The morning after Washington blacklisted a key cryptocurrency exchange, Russian operators executed a digital sleight of hand. Within hours, they had erased billions in tainted tokens and recreated them fresh, effectively laundering their financial tracks through blockchain commands.
A Kremlin-backed cryptocurrency system has processed at least $6 billion in cross-border transactions since August, demonstrating how Russia continues to circumvent Western financial restrictions. The Financial Times discovered that administrators of A7A5, a stablecoin central to Russia’s alternative payments empire, destroyed and immediately recreated over 80 percent of its supply to sever ties with Grinex, a newly sanctioned exchange.
Digital Destruction and Rebirth
Operators emptied two Grinex-linked wallets holding 33.8 billion tokens valued at $405 million using a “destroyBlackFunds” instruction. They simultaneously minted identical amounts in a new wallet, breaking the digital trail between sanctioned and clean funds. This new wallet has since facilitated $6.1 billion in transactions, operating exclusively during Moscow business hours.
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Promsvyazbank, a sanctioned Russian defense lender, controls 49% of the A7 network, which claims to have moved $86 billion in ten months. Bank chief Petr Fradkov recently told President Putin they’re building a cross-border settlement system based on A7. Russia formally recognized A7A5 as a digital financial asset last week, allowing official use through state-backed platforms.
