USDT draws scrutiny as Elliptic details Russia evasion

Five Russia-linked exchanges are aiding sanctions evasion, Elliptic finds

Elliptic has identified a network of five Russia-linked crypto exchanges, Bitpapa, ABCeX, Exmo, Rapira, and Aifory Pro, facilitating sanctions evasion via ruble-to-crypto channels and stablecoin bridges. The analysis describes how activity dispersed after prior enforcement against Garantex, with flows rerouting through alternative platforms rather than disappearing.

According to Elliptic, ABCeX processed at least $11 billion in ruble-to-crypto volume, with portions flowing to sanctioned entities including Garantex and Aifory Pro. The report also notes that Exmo, despite public claims of exiting Russia, shares wallet infrastructure with its Russian-facing brand Exmo.me, indicating potential operational continuity.

Elliptic links this activity to mechanisms such as peer-to-peer (P2P) trading, wallet obfuscation to mask provenance, and cross-border payment routes. A ruble-backed instrument, the A7A5 stablecoin, is flagged as a key bridge into USDT, enabling value transfer while seeking to reduce exposure to freezes and deplatforming.

Why this network matters for OFAC, FinCEN, and EU action

FinCEN has underscored that facilitating sanctions evasion through crypto is enforceable, highlighting 2024 designations of platforms such as Cryptex and PM2BTC for laundering tied to Russian cybercriminals. These moves signal heightened expectations around controls for exchanges, OTC desks, and P2P brokers that touch Russia-linked flows.

As reported by The Block, European Union institutions have considered stricter measures, including curbs on transactions involving Russian-linked entities and tighter oversight to prevent new venues from filling gaps left by Garantex. The policy debate reflects a shift from single-entity takedowns toward disrupting the broader network effects identified in recent analytics.

Officials have characterized target platforms bluntly to deter facilitation and signal coordinated enforcement. “Illicit Russian virtual currency exchanges,” said Bradley T. Smith, Acting Under Secretary, U.S. Treasury, in describing the focus of recent actions and the intention to disrupt the associated networks.

Immediate compliance and risk implications for crypto platforms

For compliance teams, the findings reinforce that sanctions risk is concentrated in network patterns, ruble-to-stablecoin ramps, USDT bridging, and clusters that transact with designated or high-risk venues. Controls should be calibrated to detect repeated small-lot P2P trades, wallet obfuscation typologies, and deposit/withdrawal behavior consistent with exchange-to-exchange hopping.

Institutions may need to reassess reliance on basic KYC and static screening, elevating behavioral analytics that identify co-traveling wallets, shared infrastructure with Russia-facing brands, and exposure to entities cited in recent designations. Where indicators converge, e.g., A7A5-to-USDT conversions linked to known clusters, risk scoring and case escalation thresholds may warrant adjustment.

Industry analyses have long cautioned that non-compliant exchanges and loosely supervised P2P markets represent weak links for AML/CFT, enabling sanctions exposure even for platforms with otherwise robust controls, according to American Banker. In practice, policies such as source-of-funds verification for high-velocity merchants, limits on sanctioned-jurisdiction payment rails, and enhanced due diligence for exchange-to-exchange corridors could reduce inadvertent facilitation.

How P2P, wallet obfuscation, and A7A5 enable evasion

As reported by Blockonomi, P2P marketplaces allow counterparties to arrange ruble-settled trades outside formal order books, while wallet obfuscation, through peel chains, rapid address rotation, and exchange intermediation, complicates end-to-end tracing. Cross-border routes further fracture audit trails by moving through multiple jurisdictions before landing in liquid markets.

According to Cointelegraph, the A7A5 stablecoin operated as a ruble-pegged bridge into USDT, processing more than $100 billion on-chain before sanctions and countermeasures curtailed usage. By minimizing dwell time in the ruble-linked asset and rapidly converting to USDT, participants sought to reduce asset-freeze risk while preserving access to global liquidity.