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A ruble-backed stablecoin has come under investigation after blockchain analysis revealed it destroyed more than 80% of its token supply shortly after U.S. sanctions targeted its partner exchanges, including Grinex and Garantex.
The issuer, A7A5, reissued nearly its entire supply through new blockchain wallets in what analysts describe as an attempt to erase transaction histories linked to sanctioned Russian entities, including state-owned Promsvyazbank. The maneuver has raised alarms among regulators and compliance experts, who say it represents one of the most sophisticated sanctions evasion attempts yet detected in crypto markets.
‘The way A7A5 handled its re-minting raises major red flags for compliance,’ Dr. Nathan Cole, senior analyst at Global Ledger, told Bloomberg. ‘By severing on-chain links to sanctioned entities, they effectively created a digital clean slate—something regulators will not take lightly.’
Since the re-minting, over $6.1 billion in transactions have been routed through A7A5’s new wallet addresses, according to data reviewed by the Financial Times.
The controversy deepened in August when U.S. Treasury officials sanctioned the Kyrgyzstan-based exchange Grinex, alleging that it acted as a successor to Garantex which is a Moscow-linked platform blacklisted in 2022 for facilitating transactions related to terrorism, hacking, and narcotics.
Just days after the sanctions were issued, blockchain data reviewed by the Financial Times revealed that A7A5 used a smart contract function called “destroyBlackFunds” to eliminate more than 80% of its token supply, labeling them as “dirtyShares.” The destroyed tokens were then reissued in fresh wallets identified by the prefix “TNpJj,” effectively breaking the link to previously sanctioned addresses.
Unlike traditional transfers that maintain a traceable link between wallets, this re-minting method severs the connection entirely which is a feature analysts describe as a “compliance evasion tactic.”
Since the incident, over $6.1 billion worth of transactions have been routed through A7A5’s new TNpJj wallet.
“Setting up the new wallet suggests the operators of the ruble-backed stablecoin have learned from the Garantex takedown and adjusted accordingly,” the Financial Times report stated.
Grinex has denied any connection to Garantex, but multiple blockchain investigations including one by Swiss analytics firm Global Ledger have shown overlapping transaction patterns between the two. The firm reported that large sums of A7A5 tokens were transferred to Grinex shortly after Garantex was shut down, suggesting coordinated fund movement between the exchanges.
Further, an unnamed Grinex employee allegedly told investigators that “former Garantex users physically visited Grinex offices to move their funds.” These revelations come on the heels of Tether’s decision to freeze over 2.5 billion USDT in March 2024 belonging to Garantex-linked wallets which is a move praised by global regulators as a landmark enforcement action.
The ruble-backed stablecoin’s issuer, A7A5, operates under a Kyrgyz company called Old Vector, which itself was sanctioned by the U.S. Office of Foreign Assets Control (OFAC) in August.
Despite this, A7A5 recently received digital financial asset status from Russian authorities, legitimizing its use for trade settlements and cross-border payments backed by Promsvyazbank’s ruble reserves.
Promsvyazbank already sanctioned for funding Russia’s military reportedly holds a 49% stake in the A7 cross-border payments network involved in A7A5’s creation. This state connection further cements the ruble-backed stablecoin as an extension of Moscow’s ongoing effort to build an alternative financial network resistant to Western sanctions.
The revelations have sent shockwaves through the international crypto community. During Token2049 which is one of Asia’s largest crypto events, A7A5 had been listed as a sponsor before being quietly removed from the event’s website following media inquiries. A7A5 executive Oleg Ogienko was also withdrawn from the speaker lineup after confirming that the company was indeed targeted by Western sanctions.
Ogienko later told reporters that A7A5 “operates transparently under Kyrgyz law and is not involved in any illicit activity,” emphasizing that the ruble-backed stablecoin serves “legitimate business and cross-border trade needs.”
However, compliance experts disagree. Even if they claim to operate legally in Kyrgyzstan, their ties to sanctioned Russian banks make the ruble-backed stablecoin a serious compliance risk for global exchanges, — Maria Tan, Head of Risk and Policy at ChainReg Analytics, told Reuters.
Previous reports indicate that A7A5 facilitated over $9.3 billion in transactions within just four months of launch which is a figure that underscores both its scale and the urgency of regulatory oversight.
The unfolding A7A5 case illustrates how quickly sanctioned actors can adapt in the digital economy. By leveraging blockchain features like re-minting and smart contract modification, operators of the ruble-backed stablecoin are testing the limits of sanctions enforcement.
For policymakers and crypto investors alike, the situation highlights the need for unified international frameworks to track and regulate stablecoins tied to sanctioned jurisdictions. Without such coordination, experts warn, the next-generation ruble-backed stablecoin could become a powerful tool for financial evasion.
