--- title: "The Kremlin’s sanctions plumbing runs on shell firms, a fugitive and its own stablecoin" description: "A network called A7, steered by convicted Moldovan fraudster Ilan Shor, has moved billions for Moscow, reports say" author: "Nate Ledger" published: 2026-10-04T04:00:00Z modified: 2026-10-04T13:05:49Z url: https://rews.cc/a/the-kremlin-s-sanctions-plumbing-runs-on-shell-firms-a-fugit-f770d9 language: en tags: ["sanctions", "russia", "crypto", "money-laundering", "ukraine", "world"] publisher: "Rews (https://rews.cc)" --- # The Kremlin’s sanctions plumbing runs on shell firms, a fugitive and its own stablecoin *A network called A7, steered by convicted Moldovan fraudster Ilan Shor, has moved billions for Moscow, reports say* By Nate Ledger · October 4, 2026 · https://rews.cc/a/the-kremlin-s-sanctions-plumbing-runs-on-shell-firms-a-fugit-f770d9 ## In brief - A7, a Kyrgyzstan-based network steered by Moldovan fugitive Ilan Shor, was built from spring 2024 to move Russian money - The FT says over $6.9B moved via banks including Standard Chartered, Citigroup and Deutsche Bank; some bought military gear - An automated system relabelled drone components on invoices as LED lights or barber chairs - A7’s ruble-pegged stablecoin A7A5 is designed so it cannot be frozen by authorities - Grizzly Research estimates $1B+ flows through Raiffeisen’s Russian accounts; the bank defends its compliance systems The sanctions regime against Russia is approaching its fifth birthday — the invasion began on February 24, 2022 — and by now it is less a wall than a particularly expensive sieve. Some of the holes were drilled on purpose: Europe and the United States deliberately left channels open for things like limited hydrocarbon purchases, and the same Europe that sanctions Moscow is still debating, at Ukraine’s urging, what to do with its frozen Russian assets. And to be fair, the restrictions have bitten: Russia’s acquisition of dual-use military equipment has been constrained, and its real economy faces a serious crisis of higher import and export costs. But Russia has not yielded. It has adapted, and the adaptation has a name: A7. The sequence ran roughly like this. The EU kicked several Russian banks off SWIFT early in the war; in December 2023, then-president Joe Biden signed an executive order threatening secondary sanctions on any financial institution processing transactions for Russia’s military-industrial complex. Faced with isolation, the Kremlin sponsored a parallel financial structure. A7 was born in Kyrgyzstan, backed by Moscow and built from what reporting by the OpenSource Center with blockchain analysis firm TRM Labs describes as a constellation of shell companies. “It’s a company-creating machine,” a sector source says. It processes payments and issues its own stablecoin, A7A5. ## The fugitive at the switch Every good plumbing system needs a plumber, and A7’s is Ilan Shor, a Moldovan businessman implicated in one of the largest bank frauds in European history: nearly $1 billion (€886 million) diverted from three Moldovan banks in an operation planned over years, which ultimately cost Moldova 12% of its GDP. Accused of money laundering and embezzlement, Shor fled to Russia in 2023 — arriving on a private jet owned by Roman Abramovich — and was welcomed despite Moscow having barred his entry a decade earlier for using false diplomatic license plates. There is a certain logic to hiring a man with this résumé for this job. If your problem is moving money that is not supposed to move, you want someone who has already moved a billion dollars that was not supposed to move. The network took shape in spring 2024 and within months held licenses from Russia’s central bank to operate as a distributor, broker and securities depository. Satellite entities followed — A7 LLC, A7-Agent LLC, A7 Technologies LLC — offering financial services alongside wholesale trade in fuels, metals and commodities. The crucial layer was offshore: shell companies in Kyrgyzstan, which served as the connection point to the international banking system, plus Hong Kong, China, Turkey, the UAE and several African countries. Formally they are local firms run by local businessmen; in practice they are tied to or controlled by A7, and their job is to obscure where the money comes from and where it is going. TRM sources estimate the network operates in at least 20 countries. The point of the structure is simple: foreign shell companies hold foreign bank accounts in multiple currencies, so they can pay foreign suppliers on behalf of Russian clients while the Russian client stays invisible. And move money it did. According to a Financial Times investigation, the Kremlin was able to route more than $6.9 billion through international banks including Standard Chartered, Citigroup and Deutsche Bank, with part of the money used to buy military equipment. The reason this raised so few alarms is the second layer of the machine: an automated system for falsifying invoices and receipts, rewriting product descriptions and identification codes. Components for building drones — optical transceivers, motors for unmanned aerial vehicles — appeared on paper as LED lights or barber chairs. Nobody at a correspondent bank loses sleep over a shipment of barber chairs. ## Crypto, but loyal to the ruble The third layer was cryptocurrency, and here Shor has been admirably candid, at least with his boss. In a September 4 videoconference with Vladimir Putin last year, he boasted: “In 10 months we have processed between 1,500 and 2,000 transactions daily. The plan for 2025 is to pay 20 billion rubles \[about €210 million\] in taxes.” Read that quote again, because it is the whole scheme in one sentence: the sales pitch for a sanctions-evasion network is its tax contribution. A sector source makes the same point as a general principle: “The best way to evade sanctions and launder money is to create a company in a regulated country, hire respectable people and pay taxes.” Respectability as a service. Shor was joined on the call by Piotr Fradkov, owner of the Russian bank PSB, the structure’s other pillar. The Russian outlet Proekt, which obtained company documents, laid out the crypto plumbing in April. A Russian buyer who wants to pay a foreign supplier sends rubles to A7 in Kyrgyzstan via PSB, which provides infrastructure and loans; Kyrgyz law is permissive on crypto, which launders the origin. Intermediary companies buy crypto on Grinex, an exchange affiliated with A7; A7-linked intermediaries in third countries — especially in the Middle East and Southeast Asia — convert it into local currency and pay the seller, who then ships the goods to Russia. The FSB knows all this and looks the other way, Proekt reports, because the elite uses the same rails to import luxury items. One design problem remained: ordinary cryptocurrencies are too volatile to settle invoices in, worth 100 one day and 50 the next. So A7 issued its own stablecoin, A7A5, pegged to the ruble — engineered, unlike the market-leading stablecoins, specifically to evade controls: it cannot be frozen, making it harder for authorities to intervene when illicit activity is suspected. The compliance-resistant feature is the product. ## The banks that stayed A7 is not even the only workaround. Until the end of 2024 — two and a half years into the war, after two and a half years of sanctions — state-owned Gazprombank went unsanctioned so gas and oil payments could keep flowing through SWIFT. And a couple of European banks still operate in Russia. Austria’s Raiffeisen Bank was back in the headlines last week after short-selling research firm Grizzly Research called it a “key channel” for sanctions evasion, estimating more than $1 billion in commercial transactions flows through its accounts, some involving military material. The bank’s reply is a masterpiece of the genre: “We support the robustness of our compliance systems, which have been reviewed on numerous occasions.” Translation: the machine works, and it has been tested. Italy’s UniCredit is the other name in the frame. In May it announced the sale of its Russian subsidiary to an investor from the UAE — but the deal closes next year, and UniCredit will keep a division that “will focus on international payments in euros and dollars for Western corporate clients and non-sanctioned Russian clients.” The economics of this residual business are almost elegant. Raiffeisen receives transfers through an intermediary entity in Austria, forwards them to Russia, and charges fees that can approach 15% of the transaction. On arrival, Kremlin currency rules mean dollars and euros can’t be withdrawn and must be converted to rubles at a rate about 10% worse than the central bank’s official one. Do the arithmetic: getting money into Russia now costs something like a quarter of its value, between the fee and the haircut on conversion. Sanctions, it turns out, didn’t stop the payments business. They just made it wildly profitable for whoever still answers the phone.