How is crypto used to evade sanctions?

Crypto is used to evade sanctions mainly as a payment rail that sits outside banks. Sanctioned groups use exchanges that ignore sanctions, cross-border settlement firms and purpose-built tokens to settle trade or move money out of a country. This guide explains the pattern through recent government actions, not how to do it. The legal side of US sanctions on crypto is covered in what are OFAC crypto sanctions.

How is crypto used in Russia sanctions evasion?

The best-documented case is Garantex. Treasury says the exchange was founded in 2019, registered in Estonia and run mostly from Moscow and St. Petersburg. Estonia pulled its license in February 2022 over anti-money laundering failures, and OFAC sanctioned it on April 5, 2022. Treasury calls it an exchange of choice for cybercriminals that processed over $100 million tied to illicit actors, including ransomware groups.

Garantex kept running. Treasury says it built systems to stop financial institutions from linking its wallet addresses to it. On March 6, 2025, the US Secret Service, working with German and Finnish police, seized its domain and froze over $26 million in crypto.

What happened to Garantex after the takedown?

Its staff moved the business. Treasury says Garantex employees created Grinex right after the March 2025 action to take over customer deposits, and Grinex has since handled billions of dollars in crypto transactions. On August 14, 2025, OFAC re-designated Garantex and sanctioned Grinex, its executives and six linked companies in Russia and Kyrgyzstan.

Some customers who lost access in the takedown were repaid in a new token, A7A5. That detail tied the exchange to a wider network built around a firm called A7.

What is the A7A5 stablecoin?

A7A5 is a token pegged to the Russian ruble, issued by a Kyrgyz company, Old Vector. Treasury says it was created for customers of A7 LLC, a Russian cross-border settlement platform owned by sanctioned businessman Ilan Shor and the sanctioned bank Promsvyazbank. A7 and Old Vector were designated in August 2025.

Elliptic says A7A5 launched in January 2025 on the Tron and Ethereum blockchains and had recorded $41.2 billion in cumulative transfers by late July 2025. The EU's 19th sanctions package, announced on October 23, 2025, banned EU persons from any transactions involving A7A5 from November 25, 2025. For how pegged tokens normally work, see what is a stablecoin.

On October 1, 2026, Treasury went further and sanctioned the A7 Network as a significant transnational criminal organization, saying Iran also uses it to evade sanctions. FinCEN found its sub-agents processed more than $17 billion between January 2025 and June 2026.

How does OFAC sanction crypto, and why is evasion traceable?

OFAC adds people, firms and wallet addresses to its sanctions list, which bars US persons from dealing with them. Public blockchains then work against evaders. TRM Labs traced Garantex wallets moving funds into A7A5 as early as January 2025, through an address OFAC later labeled as Garantex-controlled. How investigators follow funds is explained in can cryptocurrency be traced.

Rules differ by country and change often. Check the regulator or a qualified professional for your own situation.