Sanctions evasion attempts via the utilization of stablecoins identified by OFAC
In a recent move to curb sanctions evasion, the U.S. Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on two entities involved in the use of the ruble-backed stablecoin A7A5.
A7 LLC and Old Vector LLC are now under sanctions for their roles in facilitating large-scale transactions that help circumvent traditional financial controls on Russia. A7 LLC, which is partly owned by a convicted fraudster Ilan Shor and the Russian state-owned Promsvyazbank (PSB), is the creator of A7A5. The stablecoin reportedly processes around $1 billion daily and over $51 billion cumulatively in transactions. Old Vector LLC, based in Kyrgyzstan, supports A7A5’s issuance under Kyrgyzstan’s permissive crypto regulatory framework.
However, Sergey Mendeleev, Exved, and the Independent Decentralized Finance Smartbank are not currently mentioned in the most recent sanctions reports or search results related to A7A5 or sanctions evasion.
Meanwhile, the successor exchange to the shuttered Garantex, Grinex, has been newly sanctioned for continuing illicit crypto transactions linked to Russian evasion schemes. Grinex, which took over Garantex's operations to evade enforcement, has been involved in crypto transactions exceeding $1.8 billion. OFAC also targeted executives involved in this network.
The U.S. Treasury's recent sanctions actions underscore the increasing focus on stablecoins like A7A5 that are backed by sanctioned entities and used to move large volumes of funds quickly and outside traditional banking systems to evade sanctions. The involvement of Russian state-owned banks in these networks highlights the strategic importance of these digital assets in ongoing sanctions circumvention.
Users can now ensure they do not inadvertently process funds originating from or being sent to the entities or individuals included in this designation. For more details on other related entities or specific individuals, further information is available upon request.
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The sanctions imposed by the U.S. Treasury's Office of Foreign Assets Control (OFAC) extend beyond A7A5's creators, also targeting Old Vector LLC for its support of A7A5's issuance under a permissive crypto regulatory framework. The blockchain analytics industry is increasingly focused on monitoring transactions in the digital finance sector, given the evolving use of technology in politics, including sanctions evasion. Despite not being mentioned in the latest sanctions reports, Sergey Mendeleev, Exved, and the Independent Decentralized Finance Smartbank warrant scrutiny, given their potential role in the general-news landscape.
