Sanctions vs. Russia’s Shadow Schemes in the Middle East
While the West battles Russian banks, Russia’s shadow crypto-logistics thrives in Dubai and Ankara – can sanctions stop this flow?
While the West’s attention is focused on major Russian banks and oil tankers, the real logistics of Russia’s shadow trade have gradually shifted to another plane – digital. And its key hub is now the countries of the Middle East. A significant portion of Russia’s gray logistical routes, linked to the procurement of dual-use goods, cryptocurrency transfers, and offshore profit optimization for Russian corporations, passes through the United Arab Emirates, Türkiye, Iran, and to some extent Lebanon.
The Need to Continue Dismantling Gray Schemes: IT Logistics as a Facade for Gray Exports
The new reality is that Russian IT companies opening offices in Dubai, Ankara, or Bahrain increasingly operate not as software developers but as “logistical intermediaries” servicing export schemes: fictitious B2B services, payment wrappers for crypto deals, and sometimes digital masks for real trade chains. Through them, Russia repackages sanctioned goods – chips, drones, control platforms – and pays for them via cryptocurrency, mixed payment gateways, or offshore wallets.
A significant role is played by “servicing” companies: fintech startups registered in Dubai that use APIs of European or Asian payment systems to transfer funds from Russia into USDT or Dirham, bypassing SWIFT. Often, these companies disguise themselves as legal-tech, EdTech, or cybersecurity firms – but in reality, they service the gray logistics of Russian exports.
Crypto Becomes Russia’s New “Gazprom”
After the partial destruction of Russian oil and gas monopolism in 2022–2024, Russia invested heavily in creating an alternative financial ecosystem – crypto-logistics. Its backbone is an extensive network of exchanges, mining pools, P2P wallets, and proxy wallets operating in friendly or neutral jurisdictions. In 2023, up to 82% of all transactions of Russian sanctioned companies passed through crypto exchanges like Garantex. After Garantex was partially blocked by the U.S. in 2022–2023, the Kremlin redirected operations to other exchanges – partly to Iran, partly to the UAE, and partly to Hong Kong.
The year 2025 marked the launch of A7A5—Russia’s shadow CBDC. Unlike classic CBDCs, this project was not created for a regulated financial market but as a tool to bypass sanctions and mask foreign economic activity. Built on a modified Hyperledger Fabric blockchain with embedded GOST encryption algorithms, the system effectively hides any transactional activity from global blockchain explorers.
A7A5 has conversion gateways to the digital ruble, works with Russian crypto exchanges, and is used in contracts with the Global South and some BRICS countries. Its autonomy and cryptographic isolation make A7A5 nearly inaccessible to monitoring by Western intelligence agencies, making it an ideal platform for shadow B2B settlements. In the long term, A7A5 has the potential to become the core of a closed financial ecosystem where Russia dictates the rules on its own digital island.
Can Sanctions Be an Effective Tool to Pressure Intermediary Firms and Middlemen?
Nevertheless, there is a way to limit this parallel infrastructure operating through IT companies and financial “nodes” in the Middle East. Identifying and sanctioning logistical intermediaries that facilitate transactions through A7A5 or closed P2P clusters has extremely high potential.
First, companies in the Emirates or Türkiye fear falling under secondary sanctions, especially if they have accounts in European banks or work with Asian traders. Second, cryptocurrency exchanges, even if formally independent, leave digital traces: it is sufficient to align blockchain intelligence units with customs authorities to unravel the schemes.
Amid U.S. threats to penalize even foreign banks for facilitating the purchase of Russian oil, a trend of “preemptive refusal” to engage in deals with Russia is already emerging in India: state-owned banks (SBI, PNB) have started freezing payments, and in the UAE, several exchanges have closed trading wallets linked to Russian B2B operations. This chain can be further pressured: sanctions against technological intermediaries in Dubai, investigations into structures with Russian capital in the fintech sector, and the seizure of accounts servicing A7A5 transactions – all of this is realistic and, most importantly, effective.
Russia’s shadow crypto-infrastructure is not a marginal technology for evading sanctions but a central artery of gray exports and payments for illicit goods. It is through this infrastructure that Russia maintains access to chips, drones, telecom equipment, and even laser optics. If this artery is cut off – not only through SWIFT or oil restrictions but through the targeted destruction of digital schemes in Türkiye, the UAE, and India – Russia’s export system will take a blow to its foundation.
Sanctions against logistical fintech structures operating in gray zones are an underutilized lever. And if applied skillfully, Russia will lose not just crypto exchanges but the foundation of its “military-trade” chains.
Bohdan Popov, Head of Digital at the United Ukraine Think Tank, communications specialist and public figure