The UK sanctioned a Kyrgyzstan-based bank and crypto exchange on Wednesday, citing their support for A7A5, a stablecoin backed by the Russian ruble.A7A5 has been used to evade sanctions that the US and UK imposed on Russia after it invaded Ukraine in 2022, according to crypto forensics firms TRM Labs and Elliptic. “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,” UK Sanctions Minister Stephen Doughty said in a statement. “These sanctions keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest.”The UK sanctioned Capital Bank, a Kyrgyzstan-based bank, and cryptocurrency exchange Grinex, which crypto tracing firm TRM Labs has described as a “successor platform” to Garantex, a previously-sanctioned Russian exchange. It also sanctioned Meer, a centralised crypto exchange registered on December 9, 2024 — the same day that Grinex and A7A5 were established, according to TRM. The ruble-pegged A7A5 is issued by Kyrgyzstani company Old Vector and designed to facilitate the recovery of assets belonging to Garantex customers, according to TRM. About $26 million in Tether’s stablecoin USDT on Garantex was frozen after officials in the US, Germany, and Finland seized the exchange’s primary domain in March. (UK officials did not accuse Tether of aiding in Russian sanctions evasion in their Wednesday notice. But US authorities opened an investigation into the company last year for possible violations of sanctions and anti-money laundering rules, according to a Wall Street Journal report. CEO Paolo Ardoino accused the newspaper of “regurgitating old noise.”) “Former Garantex customers were credited with A7A5 in amounts equivalent to their frozen balances, which could then be traded or redeemed on [Grinex],” TRM wrote in its August 4 report. In late June, crypto forensics firm Elliptic said over $1 billion was being transferred through A7A5 daily, with the aggregate value of the stablecoin’s transfers topping $41 billion. A7A5 is a yield-bearing stablecoin, paying holders 50% of the interest earned on the bank deposits that back it, according to its documentation. It is available on Ethereum and TRON. “We are creating not just a ruble stablecoin, but a tool that gives the market the opportunity to safely enter the ruble and USDT, as well as an alternative to USDT that is not subject to sanctions risks,” the team behind A7A5 has said, according to Elliptic, which did not provide a source for the quote. The stablecoin’s developers did not immediately respond to DL News’ request for comment submitted through the A7A5 website on Wednesday. Its X account did not appear to address Wednesday’s sanctions. “A7A5 is a fully regulated token that has been issued in accordance with Kyrgyzstan’s new legislation, providing an unparalleled level of trust and security for investors,” its website states. In addition to Grinex and Meer, it is also available on sanctioned peer-to-peer exchange Bitpapa; Ethereum-based decentralised exchanges Uniswap and Curve; and a purpose-built DEX dubbed A7A5 DEX. As of late June, the stablecoin had seen $8.5 billion in exchange volume, a figure that does not include volume on peer-to-peer exchanges or over-the-counter brokers. Of that volume, 61% was used to move in and out of rubles; the remainder was used to move in and out of USDT. Last week, the US sanctioned Garantex Europe OU, Grinex, and six associated companies. Last year, Russian finance minister Anton Siluanov said the country was using Bitcoin and digital currencies with international trade partners in an effort to counter Western sanctions. Russia’s experimentation with cryptocurrency follows years of limits on its financial activities abroad.In 2014, the US and other European countries imposed sanctions on Russian companies and individuals after President Vladimir Putin ordered the annexation of Crimea, a region of Ukraine.In 2022, the US and other countries increased Russian sanctions after Putin’s broader invasion of Ukraine.Aleks Gilbert is DL News’ New York-based DeFi correspondent. Got a tip? Email at aleks@dlnews.com.The UK sanctioned a Kyrgyzstan-based bank and crypto exchange on Wednesday, citing their support for A7A5, a stablecoin backed by the Russian ruble.A7A5 has been used to evade sanctions that the US and UK imposed on Russia after it invaded Ukraine in 2022, according to crypto forensics firms TRM Labs and Elliptic. “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,” UK Sanctions Minister Stephen Doughty said in a statement. “These sanctions keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest.”The UK sanctioned Capital Bank, a Kyrgyzstan-based bank, and cryptocurrency exchange Grinex, which crypto tracing firm TRM Labs has described as a “successor platform” to Garantex, a previously-sanctioned Russian exchange. It also sanctioned Meer, a centralised crypto exchange registered on December 9, 2024 — the same day that Grinex and A7A5 were established, according to TRM. The ruble-pegged A7A5 is issued by Kyrgyzstani company Old Vector and designed to facilitate the recovery of assets belonging to Garantex customers, according to TRM. About $26 million in Tether’s stablecoin USDT on Garantex was frozen after officials in the US, Germany, and Finland seized the exchange’s primary domain in March. (UK officials did not accuse Tether of aiding in Russian sanctions evasion in their Wednesday notice. But US authorities opened an investigation into the company last year for possible violations of sanctions and anti-money laundering rules, according to a Wall Street Journal report. CEO Paolo Ardoino accused the newspaper of “regurgitating old noise.”) “Former Garantex customers were credited with A7A5 in amounts equivalent to their frozen balances, which could then be traded or redeemed on [Grinex],” TRM wrote in its August 4 report. In late June, crypto forensics firm Elliptic said over $1 billion was being transferred through A7A5 daily, with the aggregate value of the stablecoin’s transfers topping $41 billion. A7A5 is a yield-bearing stablecoin, paying holders 50% of the interest earned on the bank deposits that back it, according to its documentation. It is available on Ethereum and TRON. “We are creating not just a ruble stablecoin, but a tool that gives the market the opportunity to safely enter the ruble and USDT, as well as an alternative to USDT that is not subject to sanctions risks,” the team behind A7A5 has said, according to Elliptic, which did not provide a source for the quote. The stablecoin’s developers did not immediately respond to DL News’ request for comment submitted through the A7A5 website on Wednesday. Its X account did not appear to address Wednesday’s sanctions. “A7A5 is a fully regulated token that has been issued in accordance with Kyrgyzstan’s new legislation, providing an unparalleled level of trust and security for investors,” its website states. In addition to Grinex and Meer, it is also available on sanctioned peer-to-peer exchange Bitpapa; Ethereum-based decentralised exchanges Uniswap and Curve; and a purpose-built DEX dubbed A7A5 DEX. As of late June, the stablecoin had seen $8.5 billion in exchange volume, a figure that does not include volume on peer-to-peer exchanges or over-the-counter brokers. Of that volume, 61% was used to move in and out of rubles; the remainder was used to move in and out of USDT. Last week, the US sanctioned Garantex Europe OU, Grinex, and six associated companies. Last year, Russian finance minister Anton Siluanov said the country was using Bitcoin and digital currencies with international trade partners in an effort to counter Western sanctions. Russia’s experimentation with cryptocurrency follows years of limits on its financial activities abroad.In 2014, the US and other European countries imposed sanctions on Russian companies and individuals after President Vladimir Putin ordered the annexation of Crimea, a region of Ukraine.In 2022, the US and other countries increased Russian sanctions after Putin’s broader invasion of Ukraine.Aleks Gilbert is DL News’ New York-based DeFi correspondent. Got a tip? Email at aleks@dlnews.com.