Some $9.3bn in four months has reportedly been moved via a new cryptocurrency token launched in Kyrgyzstan that is designed to enable cross-border payments despite Western sanctions on Russia.

Fugitive Moldovan oligarch Ilan Sor and Russian defence sector bank Promsvyazbank are behind the A7A5 token, said to be the first stablecoin pegged to the Russian ruble, according to a June 25 report from the Financial Times.

The $9.3bn was moved on dedicated crypto exchange Grinex, also initiated very recently in Kyrgyzstan, and trading only in A7A5, rubles and a dollar-pegged stablecoin, the FT found from an analysis of wallets linked to Grinex.

Kyrgyzstan has several times hit the headlines for sanctions-busting in Russia’s favour since Moscow launched its war on Ukraine in February 2022.

The A7A5 token appears to facilitate large-scale financial flows into and out of Russia. Such flows have been severely complicated by Western restrictions.

The stablecoin says it is backed by ruble deposits in Promsvyazbank, a bank subject to US, UK and EU sanctions.

The token also appears linked to the Kremlin’s attempts to use cryptocurrencies to finance political influence campaigns abroad, concludes a report by the Centre for Information Resilience (CIR), a London-based non-profit research group.

The company initially stated as behind the token is A7. Now targeted with UK sanctions, it is majority-owned by Sor, Russian corporate records looked at by the FT show. Sor fled house arrest in Moldova in 2019. He went on the run after being convicted of thieving $1bn in what was the largest ever Molovan bank fraud. 

Sor moved to Moscow. Now a Russian citizen, he was in 2024 accused by Moldovan police of operating a huge vote-buying operation in Moldovan elections. He dismissed the claims as an “absurd spectacle”. 

“Russian business figures and government officials have been talking for a while about how they might use cryptocurrency to evade sanctions in a large-scale way, particularly by creating their own stablecoin,” Elise Thomas, senior investigator at CIR, was cited as saying by the British financial daily.

Kyrgyzstan was selected given it is a “friendly jurisdiction that is not so subject to sanctions”, A7A5’s director Leonid Shumakov has said. “It is no secret that this jurisdiction is currently helping a lot to cope with the pressure [Russia] is under.”

A7A5 and Grinex seem to have taken shape and grown following the collapse of major Russian shadow payments system, Garantex, Russia’s largest crypto exchange. It was brought down by US law enforcement in March.

CIR’s Thomas was further reported as saying that “if you have a stablecoin that is controlled by an entity that is based in the West . . . you could lose your money”, meaning Russia-friendly Kyrgyzstan is a safer bet.

Last year, Sor took part in talks with Keremet Bank in Kyrgyzstan, according to the US Office of Foreign Assets Control (OFAC). It said the discussions were linked to plans “to create a sanctions evasion hub for Russia to pay for imports and receive payment for exports”. OFAC sanctioned Keremet in January.