The United Kingdom has stepped up its offensive against alternative financial channels that sustain the Russian economy amid the war in Ukraine. The focus has fallen on cryptocurrency networks used to circumvent international sanctions, demonstrating growing concern about the creation of parallel liquidity mechanisms. This move comes as Moscow seeks to expand its financing options beyond the reach of Western powers.
UK increases pressure on Russia-linked cryptocurrency networks
Britain on Wednesday sanctioned financial networks it said were being used by Russia to evade existing Western sanctions, including Kyrgyz crypto networks, as it ramps up pressure on Moscow over the war in Ukraine. The sanctions against eight individuals and entities also target the infrastructure behind A7A5, a rouble-pegged stablecoin launched in Kyrgyzstan which Britain said had moved $9.3 billion in four months.
“If the Kremlin thinks they can hide their desperate attempts to soften the blow of our sanctions by laundering transactions through dodgy crypto networks – they are sorely mistaken,” British sanctions minister Stephen Doughty said.
The measures follow talks in Washington earlier this week between U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskiy and European leaders including British Prime Minister Keir Starmer over the Ukraine conflict.
The focus on the A7A5 stablecoin illustrates how Russia has been exploring new financial alternatives to maintain international trade operations, especially in strategic sectors such as energy and defense. According to British officials, the movement of billions of dollars in just a few months has raised alarms about Moscow’s ability to structure parallel payment systems. For London and Washington, these initiatives not only weaken the effect of sanctions but also strengthen the economic support network that sustains the Russian war effort.
Targets include Kyrgyz companies and financial operators in Europe
Britain’s sanctions targeted a Luxembourg-based firm and four Kyrgyz entities including Grinex LLC and Old Vector LLC, linked to the infrastructure behind A7A5. It also sanctioned three people it said were involved in supporting Russia’s financial infrastructure, including one linked to a Kyrgyz bank used to pay for military goods.
International connections strengthen evasion scheme
The inclusion of operators in Luxembourg proves that tax evasion networks are not limited to Central Asia, but have branches in European financial centers. British authorities indicate that the combination of entities in different jurisdictions facilitates the opacity of transactions, allowing funds to reach the Russian military sector. This pattern highlights a growing challenge for Western governments: monitoring hybrid structures that combine conventional banks, shell companies, and cryptocurrencies on a global scale.
Another accused of helping evade sanctions and a third cited for providing services to the Russian state-owned Promsvyazbank. The U.S. also sanctioned Grinex and Old Vector last week, citing their roles in facilitating sanctions evasion and supporting illicit crypto activity.
UK-US coordination expands financial siege
The British sanctions reflect a coordinated effort with Washington, which had already sanctioned companies linked to the same scheme the previous week. This alignment seeks to close the loopholes exploited by Russia, increasing pressure on financial intermediaries and weakening the utility of digital currencies for illicit purposes. Experts point out that synchronization between allies increases the effectiveness of the measures, but also pressures third countries, such as Kyrgyzstan, to reconsider their stance on Moscow’s use of crypto assets.
With the new sanctions, the United Kingdom reinforces its message that it will not allow loopholes that weaken its strategy against Russia. By targeting not only banks and individuals, but also the burgeoning crypto ecosystem, London signals that the economic battle is expanding into new territories. Even as Moscow continues to seek alternatives, cooperation between Western powers tends to tighten the siege and increase the costs of sustaining parallel financial channels.
GCN.com/Reuters