06-10-2026 
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Russia’s ruble-backed stablecoin appears headed for yet another trip to the European Union’s (EU) sanctions woodshed, but the token’s ability to withstand these blows could inspire Iran to follow Russia’s lead.
- New EC sanctions coming but A7A5 proving hard to kill
- Russia sanctions U.K. high-schooler for exposing A7A5 use
- U.S. sanctions killing Iran’s love of Tether’s USDT
On June 9, European Commission (EC) President Ursula von der Leyen announced the imminent release of the EC’s 21st sanctions package against Russia following its 2022 invasion of Ukraine. As usual, the goal of the sanctions is to weaken “the economic foundations of Russia’s war effort.”
Alongside sanctions targeting Russia’s energy markets and military-industrial exports, von der Leyen said Package #21 will also target “20 banks, crypto firms or platforms and oil traders in third countries, ones that have been servicing sanctioned Russian entities and individuals or circumventing our measures. For the first time, we will introduce the possibility of a full third-country ban for crypto-asset services. It will act as a strong deterrent for the countries hosting platforms that help Russia evade our sanctions.”
The crypto firms/platforms haven’t yet been identified by name (the package reportedly won’t be finalized until July 15), but they will likely include the HTX (formerly Huobi) digital asset exchange affiliated with TRON founder Justin Sun.
The U.K.’s Foreign, Commonwealth & Development Office unleashed its own sanctions on HTX last month for “providing financial services, or making available funds, economic resources, goods or technology” linked to the defunct Kyrgyzstan-based Garantex exchange (since reborn as Grinex).
The U.K.’s sanctions also targeted HTX’s support for the A7 Network, the Kyrgyzstan-based entity behind the A7A5 stablecoin, which has become the lynchpin of Russia’s sanctions-evasion efforts. The European Union previously targeted the Kyrgyzstan-based operator of the Meer exchange for its status as “a platform where significant amounts of the government-backed stablecoin A7A5 are traded.”
And yet, according to a new report by blockchain security firm CertiK, all these UK/EU/US sanctions haven’t stopped A7A5’s rapid growth since its January 2025 launch. By the time the stablecoin was one year old, it had processed over $110 billion in cumulative on-chain transactions, claimed ~43% of the global non-USD stablecoin market, and became “the operational backbone of the Russian crypto economy.”
A7A5 holder counts grew from 13,000 in February 2025 to 29,000 in May 2026, ‘with no observable inflection at any sanctions event.” CertiK explains this lack of impact due to A7A5’s user base being “structurally non-Western and therefore largely insulated from Western enforcement pressure.” This growth is likely to continue as A7 makes further inroads into African markets, having already established offices in Nigeria and Zimbabwe.
Following the original round of Western sanctions, Tether’s USDT stablecoin “became, by default, the preferred non-ruble settlement asset for Russian commercial actors and exchanges.” But following the March 2025 takedown of Garantex by a coalition of international authorities, Tether froze $28 million worth of USDT held in Garantex-controlled wallets, and Russia decided a new plan was needed.
A wrapped version of A7A5 (wA7A5) exists on the Ethereum network, but around 99% of A7A5’s supply circulates on TRON. Christmas Day 2025 represented the highest single-day TRON transfer volume of 135 billion A7A5 tokens (US$1.7 billion). Another 102.7 billion A7A5 was transferred on TRON on May 14, 2026, ten days before the EU’s 20th sanctions package took effect.
‘Digital Promissory Notes’ allow A7A5 users to exchange physical paper notes for local cash via a Telegram bot, convert them back to A7A5, or redeem the notes for rubles. These off-chain ‘physical security instruments’ offer additional means of evading sanctions, presenting significant tracking challenges for Western authorities.
The A7 Network is partially owned by Russia’s state-owned Promsvyazbank (PSB), which passes on 50% of the interest generated by the rubles backing A7A5 to token holders. CertiK notes that this “makes A7A5 attractive to hold rather than to transact with” and “retains liquidity in-system and reduces the issuer’s effective cost of capital.”
CertiK says that while A7A5 has been the subject of a “genuinely unprecedented” wave of targeted sanctions, these measures “have contained rather than dismantled the network … the tools of compliant stablecoin infrastructure, including centralized minting, reserve backing, and on-chain compliance controls, can be mirrored and deployed entirely outside Western enforcement reach.” As a result, A7A5 “holder growth and settlement volumes are unlikely to reverse materially.”
The Evil Empire strikes back
While Russia continues to be on the receiving end of international sanctions targeting its crypto operations, the Kremlin is attempting to show that it can give as good as it gets.
On June 2, the Ministry of Foreign Affairs of the Russian Federation announced its own set of “personal sanctions against members of Britain’s media and expert community.” The Ministry said it was provoked into taking this step by “British officials’ provocative anti-Russian rhetoric” and more tangible actions that signal the U.K.’s “unflagging intention to carry on the hard-line systematic confrontation with our country.”
For our purposes, we’ll focus on a sanctioned individual called Alexander Browder, “author of the report published by the Henry Jackson Society, which contains disinformation.” Browder is the 17-year-old son of financier-turned-anti-corruption-activist Bill Browder, who was instrumental in getting the Magnitsky Act passed by Congress, targeting Russian human rights violators.
The report in question, Confronting the Illicit Finance Hydra in Crypto Markets, was published in March and sought to shed light on “cryptocurrency-enabled money laundering,” much of it carried out in Russia with either the tacit permission or the outright involvement of the state. Browder said he used the word ‘hydra’ to illustrate how Garantex was beheaded only to be reborn as Grinex, much like the many-headed self-regenerating serpent of Greek mythology.
The report singles out Russia’s use of A7A5 and has been credited by some with sparking the U.K.’s latest round of sanctions specifically targeting the networks and platforms on which the stablecoin thrives. In a perhaps even more inflammatory move, Browder has claimed that Ilan Shor, a fugitive Moldovan banker convicted of fraud and the “mastermind” behind A7A5, “gifted the Kyrgyz president a luxury jet.”
Russia’s notice said the sanctioned individuals “are henceforth banned from entering the Russian Federation,” but we’ll go out on a limb and suggest that nobody on this list had the slightest intention of visiting Russia as long as Vladimir Putin still draws breath.Browder tweeted his response to the sanction, calling it “a badge of honor” and expressing pride at being “the first high school student in the world to ever be sanctioned by an authoritarian regime for uncovering corruption.” Browder said his spotlighting of A7A5 had “touched a raw nerve” and “exposed [Russia’s] Achilles’ heel. Without A7A5, they would not be able to fund their war of aggression.”
Iran paying attention to Russia’s moves
As noted above, Russia’s experiment with A7A5 turned serious after U.S. authorities put pressure on Tether to freeze USDT tokens linked to Garantex. This freeze/seize function is a ‘feature’ of all centrally issued tokens, and if the issuer wants to retain access to Western financial rails, they’re almost certain to comply with law enforcement requests.
Iran may soon follow Russia’s lead, if it hasn’t already set these wheels in motion. Reports from January revealed that Iran had laundered ~$1 billion worth of USDT through two U.K.-registered digital asset exchanges that were effectively a front for Iran’s Islamic Revolutionary Guards Corps (IRGC).
In April, Tether admitted freezing $344 million worth of Iran-linked USDT at the request of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). Fast forward to May 29, and Treasury Secretary Scott Bessent was bragging about having “seized about a billion dollars of [Iran’s] crypto. Just outright grabbed the wallets.”
The seizure was part of Operation Economic Fury, America’s efforts to cut off Iran’s access to the foreign currency it needs to keep its war machine humming. But unlike the April freeze/seize, in which Tether owned up to having “supported the U.S. government” in cracking down on “unlawful conduct,” Tether has yet to make any public comment on Bessent’s $1 billion cash claim.
A month before Bessent’s billion-dollar quote, he’d claimed that the U.S. had seized “nearly $500 million” of Iran’s digital assets. It’s unclear whether this latest claim represented a new cumulative total or whether he was speaking of a fresh billion grabbed in a single new action.
Intriguingly, USDT’s market cap did indeed drop by roughly that 10-figure sum on the afternoon of May 29, falling from $189.3 billion to $188.2 billion in a matter of minutes. So why no Tether compliance victory lap this time?
Meanwhile, Iran’s foreign ministry spokesperson Esmail Baghaei waited over a week to respond to Bessent’s claims, and when he did, the message was somewhat opaque. Baghaei tweeted lines from Shakespeare’s Macbeth: “Now does he feel his title hang loose about him, like a giant’s robe upon a dwarfish thief.”
(For the record, in the play, these lines are spoken by one of the Scottish nobles gathering to overthrow Macbeth, who seized the throne by murdering the existing king. The apparent suggestion is that Bessent is a usurper/pretender who’s overstepped his capacities by stealing that which he had no right to take. However, that doesn’t square with Bessent’s public persona.)
Bessent’s latest comments were followed a few days later with OFAC putting sanctions on four Iranian exchanges, including Nobitex and Wallex, the country’s two largest exchanges by volume. Also facing sanctions are Nobitex co-founders Amir Hossein Rad, Seyed Mohammad Ali Aghamir Mohammad Ali and Seyed Mohammad Aghamir Mohammad Ali, along with Nobitex CEO Seyed Ali Khoee.
OFAC’s announcement came a few days after it sanctioned Iran’s ‘Persian Gulf Strait Authority,’ aka the entity Iran said would administer the $2 million ‘tolls’ it planned to charge individual ships for navigating the Strait of Hormuz. OFAC previously warned the rest of the world that it would slap sanctions on anyone who paid these tolls, whether by “fiat currency, digital assets, offsets, informal swaps, or other in-kind payments.”
These tolls were originally said to be payable in either USDT or Chinese yuan, but later reports suggested Iran might also accept BTC, a token that lacks a central issuer and thus can’t be frozen like USDT. Regardless, it seems Iran would be better served following Russia’s lead and developing their own rial-based stablecoin post-haste.
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