The 19th Sanctions Package focuses on the A7A5 stablecoin, a Russian ruble-backed digital currency that has processed more than $70 billion in transactions since its launch in February 2025.
The EU described A7A5 as “a prominent instrument for financing activities in support of the war of aggression.” From November 25, 2025, all transactions involving the stablecoin will be banned in the 27-member bloc, marking a significant evolution in the way governments combat sanctions evasion through cryptocurrency.
What is A7A5 and why is it important?
A7A5 is a stablecoin launched in Kyrgyzstan in February 2025. Unlike volatile cryptocurrencies like Bitcoin, stablecoins are pegged to real currencies – in this case, the Russian ruble. For every A7A5 token purchased, one ruble will be deposited into Promsvyazbank, a Russian state-owned bank that finances the country’s defense industry.
The scale of A7A5’s operations is remarkable. This is reported by a blockchain analysis company Ellipticalthe stablecoin processes more than $1 billion in daily transfers. By September 2025, it had become the world’s largest non-dollar stablecoin, with its market value increasing 250% in one day to nearly $500 million.
Source: consilium.europa.eu
What makes A7A5 unusual is its ownership structure. The majority shareholder is Ilan Shor, a Moldovan businessman convicted of fraud and accused of election interference. Promsvyazbank owns the remaining stake. Both Shor and the bank are under international sanctions for their role in supporting Russia’s war effort and undermining Moldova’s democratic elections.
The Garantex connection
The story of A7A5 cannot be separated from Garantex, a Russian cryptocurrency exchange that became infamous for laundering money from ransomware attacks and darknet markets. The US Treasury Garantex was first sanctioned in 2022 after processing more than $100 million in illegal transactions.
In March 2025, a coordinated international operation seized Garantex’s websites and froze $26 million worth of cryptocurrency. Within days, a new exchange called Grinex appeared in Kyrgyzstan, run by the same people. Garantex customers who lost access to their funds were given equivalent amounts in A7A5 tokens, allowing them to continue operations despite the sanctions.
This cat-and-mouse game demonstrates the challenge of enforcing traditional sanctions in the cryptocurrency world. When authorities close one exchange, operators simply create another one under a different name. The A7A5 stablecoin facilitated this transition, processing approximately $9.3 billion through Grinex in just four months.
The US Treasury Department imposed sanctions on both Grinex and the company issuing A7A5 tokens (Old Vector LLC) in August 2025. The US State Department has offered a reward of up to $5 million for information on Aleksandr Mira Serda, the co-founder of Garantex, and up to $1 million for other key leaders. Now the EU has joined in with its own comprehensive ban.
How A7A5 helps Russia avoid sanctions
Western sanctions have cut off many Russian banks from the international payment system SWIFT, making it difficult for Russian companies to trade internationally. A7A5 offers a solution. Russian companies can convert rubles into A7A5 tokens, trade these tokens for US dollar-backed stablecoins like Tether, and then convert them into any currency they need in other countries.
This system has proven to be particularly valuable for trade with China. According to the Center for Information Resilience78% of A7 transactions pass through Chinese jurisdictions. The stablecoin has also expanded into African markets, with offices opened in Nigeria and Zimbabwe.
The trading patterns show that A7A5 mainly serves companies and not individual crypto traders. Most activity occurs during business hours on weekdays, and not in the 24/7 pattern typical of retail cryptocurrency trading. The Russian government has formally recognized A7A5 as a digital financial asset, allowing exporters and importers to officially use it for trade deals.
Electoral interference and political operations
In addition to sanctions evasion, leaked documents also reveal A7A5’s role in political interference. Internal files from A7 companies show employees discussing apps used to pay political activists and conduct polls in Moldova. One app called Taito was flagged by Moldovan police for illegal election financing and voter bribery.
These political operations are funded through cryptocurrency, allowing them to continue despite sanctions against Shor and his associates. Chat logs show USDT transfers of millions of dollars for “treasury” purposes, demonstrating how digital assets enable sanctioned individuals to conduct financial activities.
Ilan Shor boasted in a September 2025 speech to Russian President Vladimir Putin that A7 had facilitated 7.5 trillion rubles (about $89 billion) in cross-border transactions for Russian companies in just ten months. The figures underscore how cryptocurrency has become central to Russia’s strategy to maintain international trade despite Western sanctions.
What the new sanctions mean
The EU sanctions package targets multiple entities beyond just the A7A5 token itself. Sanctions have been imposed on the stablecoin’s developer, the Kyrgyz issuer and a Paraguay-based exchange that facilitated A7A5 trading. The EU also banned eight banks and oil traders from Tajikistan, Kyrgyzstan, the UAE and Hong Kong for helping Russia circumvent the restrictions.
Five additional Russian banks face a transaction ban: Istina, Zemsky Bank, Commercial Bank Absolut Bank, MTS Bank and Alfa-Bank. The package also bans EU companies from offering crypto services that could help Russia build an alternative financial infrastructure.
For EU-based cryptocurrency exchanges and service providers, the November 25 deadline means they must identify and block all transactions involving A7A5. Companies that do not comply with this will face possible fines and sanctions.
However, enforcement remains a challenge. A7A5 runs on the Ethereum and Tron blockchains, meaning it exists on thousands of computers around the world without a central point of control. When US authorities imposed sanctions on Grinex in August, the stablecoin continued to grow. Following previous sanctions, operators destroyed and reissued more than 80% of all A7A5 tokens to disconnect from sanctioned wallet addresses and continued operations with the new tokens.
The Crypto Sanctions Arms Race
This is the first time the EU has banned a specific cryptocurrency and comprehensive crypto infrastructure supporting Russia. The move follows similar actions by the US and Britain, showing coordinated Western efforts to close cryptocurrency law loopholes in sanctions enforcement.
According to blockchain analytics firm Chainalysis, $376.3 billion worth of cryptocurrency transactions were carried out in Russia between July 2024 and June 2025. This enormous volume shows how crucial digital assets have become for the Russian economy under sanctions.
The situation highlights the dual nature of cryptocurrency technology. While digital currencies offer potential benefits for financial inclusion and efficiency, they also create new challenges for law enforcement and sanctions enforcement. The borderless nature of blockchains, combined with the difficulty of identifying transaction participants, makes traditional regulatory approaches less effective.
Russia has responded by actively legalizing cryptocurrency for international trade. Finance Minister Anton Siluanov has publicly supported the use of digital currencies to counter sanctions, recognizing its usefulness for cross-border capital flows. The government granted A7A5 official status and integrated it into Russia’s formal financial system.
Digital dollars will not win this war
The EU ban on A7A5 marks a turning point in sanctions policy, recognizing that cryptocurrency has become too important to ignore. By focusing not only on the stock exchanges, but also on the digital currency itself, regulators are adapting their instruments to tackle the threat.
Yet the decentralized nature of blockchain technology means this will remain an ongoing challenge. When one exchange closes, another appears. If one token is penalized, operators can create new tokens. The question is not whether these sanctions will have an impact – they will. The question is whether that impact will be enough to meaningfully limit Russia’s ability to use cryptocurrency to evade sanctions and whether Western authorities can keep pace with the rapidly evolving tactics of those trying to circumvent restrictions.
For now, November 25 represents a new front in the economic war between Russia and the West, which is being fought not with traditional financial weapons, but with lines of blockchain code.
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