The European Union has sanctioned key actors accused of weaponizing cryptocurrency to interfere in democratic elections and bypass international sanctions, including pro-Kremlin influencer Simeon Boikov and the Moldova-based platform A7.
Boikov, known as the “Aussie Cossack,” was designated for disseminating pro-Russian disinformation, including a fabricated video alleging voter fraud in Georgia in the 2024 U.S. election.
He received donations via cash-to-crypto services, darknet markets, and non-KYC Russian exchanges, according to a TRM Labs report released Tuesday.
The sanctions also targeted A7 OOO, a company linked to efforts to influence Moldova’s 2024 presidential elections and EU accession referendum through direct vote-buying schemes.
The EU said that A7 was used by Ilan Shor, a fugitive Moldovan oligarch, who previously orchestrated the 2014 bank fraud scandal that drained $1 billion from Moldova’s economy.
The A7 platform issued A7A5, a ruble-backed stablecoin “set up for the express purpose of sanctions evasion,” Isabella Chase, Head of Policy, EMEA at TRM Labs, told Decrypt.
Stablecoins are cryptocurrencies tied to the value of traditional currencies, used to enable faster, lower-cost transactions with minimal price volatility.
While media reports suggest the A7A5 stablecoin moved $9.3 billion in four months, Chase cautioned that “we don’t have an official government source for it.”
However, she noted the massive volume isn’t “really surprising” given the asset’s purpose.
Chase explained that despite the eye-catching numbers, “the number of entities involved in using it is quite small.”
“When you look at the use of other stablecoins for sanctions and the role it played in sanctions, their volume is much, much larger,” she said.
The stablecoin was previously used by sanctioned Russian exchange Garantex to transfer user funds to Kyrgyz exchange Grinex before Garantex was seized by the U.S. Secret Service in March.
TRM Labs’ blockchain analysis revealed that Garantex began moving funds into the A7A5 stablecoin as early as January, “indicating a premeditated effort to create a sanctions-resistant asset for facilitating the transfer and recovery of frozen assets.”
The firm traced connections between A7A5 and Grinex, which helped move funds abroad through shell-like entities registered to residential addresses.
These networks are increasingly used to move dual-use goods from China into Russia, the report noted.
Chase explained how Western sanctions can pressure jurisdictions like Kyrgyzstan despite geographical distance.
The sanctions create pressure on entities in what she calls “third countries, so not within the UK or the European Union or in Kyrgyzstan, who are trying to do business with all those different blocs.”
“These sanctions really put pressure on those actors to ask themselves, who are you prioritizing, your relationship with the EU and the UK, or access to A7? Chase told Decrypt.
This approach, she noted, creates reach “into the supply chains that are considering using this type of asset class.”
Cracking down on Russia’s crypto operations
The sanctions come as Western authorities intensify their crackdown on Russian crypto operations.
Earlier this month, the U.S. Treasury sanctioned Russian bulletproof hosting provider Aeza Group for facilitating cybercriminal activity, including ransomware attacks and darknet drug markets.
For the crypto industry, these sanctions highlight the need for enhanced monitoring capabilities.
“We always say it’s important to have, not just a tool that can ingest sanctioned addresses and entities, but also teams that can expand on those addresses and really understand who they’re transacting with, and what the linked entities are,” Chase said.
The expert described the latest EU action as “encouraging to see the level of coordination between the EU and the UK on tightening controls against the A7 platform.”
The UK had previously designated A7 months earlier, showing growing international cooperation in targeting Russian financial networks.
Regulatory guidance remains insufficient for this emerging sector, she said, noting that “having specific guidance from regulators on how to do sanctions implementation effectively would always be useful” as “this is a relatively new sector.”
Chase pointed to the ongoing nature of this fight against such hybrid threats, adding TRM Labs will “continue to monitor its role in the broader Russian use of crypto assets to evade sanctions.”
