In a significant move to counter Russia’s efforts to circumvent international sanctions, the U.K. announced targeted measures on August 20, 2025, aimed at dismantling a cryptocurrency network centered in Kyrgyzstan. At the heart of this network is the A7A5 stablecoin, a digital currency pegged to the Russian ruble, designed to facilitate cross-border payments while evading Western financial restrictions.
The UK government imposed sanctions on multiple entities and individuals connected to this network. The sanctions targeted Capital Bank in Kyrgyzstan and its director, Kantemir Chalbaev, who is accused of facilitating payments for Russian military supplies. British officials also sanctioned the cryptocurrency exchanges Grinex and Meer, along with several companies: Grinex LLC, CJSC Tengricoin, Old Vector LLC, and Altair Holding SA. Individual sanctions were placed on Leonid Shumakov, who directed the A7A5 stablecoin project, and Zhanyshbek uulu Nazarbek, head of the Kyrgyz Trading Company.
How A7A5 Funded Russian Military Operations
The A7A5 stablecoin created a sophisticated pipeline allowing Russia to fund military operations despite Western sanctions. Old Vector LLC issued the digital currency using deposits at Promsvyazbank, a sanctioned Russian bank. This system processed $9.3 billion in transactions over four months.
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Russian entities deposited rubles at Promsvyazbank and received A7A5 tokens in return. These tokens could be traded on exchanges like Grinex and Meer, allowing access to foreign currencies and international markets blocked by sanctions. Capital Bank processed payments for Russian military supplies using this network, converting tokens back into traditional currencies for weapons purchases.
Grinex operated as a replacement for the previously sanctioned Garantex exchange, allowing the same networks to continue funding military operations. Leonid Shumakov coordinated how the system channeled money toward Russia’s war chest, with his network providing infrastructure to move hundreds of millions of dollars while avoiding Western detection.
“These sanctions keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest,” said U.K. Sanctions Minister Stephen Doughty.
The U.S. Treasury had already targeted this network on August 14, 2025, sanctioning Garantex Europe OU and Grinex. American officials penalized three executives — Sergey Mendeleev, Aleksandr Mira Serda, and Pavel Karavatsky. Six companies in Russia and Kyrgyzstan also faced the penalties. U.S. authorities traced over $100 million in transactions supporting Russian military operations, ransomware, and darknet activities.
Kyrgyzstan’s Remains In Denial
Kyrgyzstan’s President Sadyr Japarov rejected the accusations, denying that any of the country’s 21 commercial banks helped Russia evade sanctions. He claimed that only the state-owned Keremet Bank handles Russian ruble transactions. Japarov appealed to U.S. President Trump and UK Prime Minister Starmer to reconsider sanctions, arguing they lack evidence and harm Kyrgyzstan’s economy, which depends on remittances from one million workers in Russia. Despite these denials, UK officials maintain the sanctions will disrupt the network’s ability to fund Russian war operations.
