Western governments spent three years building what they believed was an airtight financial blockade around Russia, severing its banks from SWIFT, freezing sovereign reserves, and barring major institutions from clearing dollar transactions.
And according to British authorities, Russia may have spent much of that same period engineering an alternative financial system designed to circumvent it entirely.
On May 26, the UK’s Foreign, Commonwealth & Development Office sanctioned 18 entities and individuals, including Huobi (HTX), a Justin Sun-advised exchange that processed $3.3 trillion in trading volume in 2025, and a Kyrgyzstan-linked stablecoin issuer, for allegedly helping Russia evade Western restrictions.
What distinguishes this package of sanctions from previous attempts is the legal instrument Britain reached for. For the first time, the UK applied Regulation 17A of its Russia sanctions regime to crypto exchanges.
It’s a tool that was previously reserved only for sanctioned banks, requiring all financial firms in the UK to freeze funds and sever correspondent relationships with the designated entities. Extending that rule from banks to crypto exchanges shows that regulators now see parts of the crypto industry as infrastructure equivalent to formal financial institutions.
While it’s safe to say that this doesn’t fare well for the affected exchanges, it’s a pretty significant change in how economic warfare is being waged in the UK.
The primary target of the new set of sanctions is the A7 network, a Kremlin-backed system the government says was built to bypass Western sanctions, finance military procurement, and process revenue from Russian oil exports.
A Kremlin-backed network, and the $90 billion it allegedly processed
A7 was founded in October 2024, and the UK has connected its ownership structure to the Russian government.
The majority stake belongs to Ilan Shor, an Israeli-Moldovan oligarch convicted in 2017 for his role in the theft of $1 billion from three Moldovan banks, who later received Russian citizenship.
The minority stake belongs to Promsvyazbank, a Russian state-owned bank sanctioned in 2022 for financing Russia’s military-industrial complex.
The Kremlin’s blessing was explicit: when A7 opened a physical branch in Vladivostok in September 2025, Vladimir Putin attended the virtual ribbon-cutting ceremony. A7 has also expanded into Lagos and Harare, opening offices in Nigeria and Zimbabwe as part of a push into jurisdictions less exposed to Western regulatory pressure.
While it’s not the first or last state-owned or sponsored bank to be accused of evading sanctions, it’s the scale of the operation that got the UK worried. The UK government says the A7 network claimed to have moved more than $90 billion in 2025 alone, a figure it describes as roughly equivalent to half of Russia’s annual military spending.
Chainalysis came out with a similar figure for A7A5, the ruble-backed stablecoin that serves as A7’s primary settlement rail: $93.3 billion in transactions processed in under a year, functioning as a dedicated payment system for sanctioned Russian businesses conducting cross-border trade.
The two figures refer to slightly different things (the network versus the token), but they’re describing the same underlying infrastructure and show this is considerably larger than a peripheral evasion operation.
According to the UK government’s official statement, the broader sanctions effort since 2022 has stripped more than $450 billion from Russia’s economy, the equivalent of two years of war funding, even as Russia’s Economy Ministry this month cut its 2026 growth forecast from 1.3% to just 0.4%.
TRM Labs traced $4.9 billion in direct transfers from HTX to UK-designated entities since 2021, including $1.95 billion to the already-sanctioned Garantex in 2022 and $838 million to A7 in 2025 alone. These figures sit alongside the UK’s own assessment that one exchange in the network channeled at least $1.5 billion back toward the Kremlin.
HTX has since disputed the accusation, arguing in a public statement that it applies only to Huobi Global S.A. as a separate legal entity and that its exchange operations and user funds remain unaffected, adding that it would engage directly with UK authorities on the matter.
How stablecoins became Russia’s preferred evasion rail
After it was faced with sanctions in 2022, Russian businesses turned heavily to Tether’s USDT for international transactions, since the dollar-pegged stablecoin could move across borders quickly and without requiring correspondent banking relationships that Western sanctions had effectively closed off.
USDT offered Russian firms the stability of the dollar and the frictionless transferability of crypto, a combination that served them well until US authorities seized Garantex’s USDT holdings in March 2025 and Tether froze wallets linked to the sanctioned exchange, exposing the fundamental liability of any token subject to centralized freeze controls.
A7A5 is essentially the answer to that vulnerability. Issued by a Kyrgyz entity called Old Vector LLC and backed by ruble deposits held at Promsvyazbank, it’s designed to work like USDT while resisting the specific pressure point that disabled Garantex.
After Garantex was shut down, its customers’ funds migrated to a successor exchange called Grinex, with A7A5 serving as the bridge that allowed them to move their balances without touching the global banking system.
The numbers running through it reflect a scale that the UK now sees as a systemic concern. According to Chainalysis’s 2026 Crypto Crime Report, sanctions evasion via crypto surged 694% in 2025, with sanctioned entities receiving roughly $104 billion through digital asset channels.
Stablecoins drove most of that volume, accounting for 84% of all illicit crypto transaction value.
Russia has also been leveraging its subsidized energy sector to capture roughly 16% of global Bitcoin mining capacity, effectively producing new coins with no on-chain link to any sanctioned wallet or entity, which serves as a separate but complementary layer of financial insulation.
The EU recognized that in its twentieth Russia sanctions package in April 2026, targeting A7A5 and the service layer around it. The UK’s action this week extends that coordinated response and brings banking-grade legal tools to bear on the exchanges facilitating those flows.
Whether that enforcement can keep pace with a financial system being actively engineered to anticipate and survive each new round of restrictions is the real question the $90 billion figure raises.
Western sanctions have certainly damaged Russia’s economy, but they’ve also, somewhat paradoxically, accelerated the construction of the alternative infrastructure that’ll outlast the war regardless of how it ends.
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