Inside the sanctioned stablecoin issuer A7A5’s race to build a crypto giant

HONG KONG — Oleg Ogienko, A7A5’s director for Regulatory and Overseas Affairs, is looking to debate anyone who accuses him of breaking any compliance laws through his stablecoin company.

Speaking to CoinDesk during Consensus Hong Kong, the public face of the Ruble-denominated stablecoin issuer A7A5 — which grew faster last year than USDT or USDC — stressed that, like any stablecoin issuer, compliance with the laws of where it is incorporated is key (in this case, Kyrgyzstan), and criminals are not welcome on the platform.

“We are fully compliant with the regulations of Kyrgyzstan. We do not do illegal things,” he said, emphasizing the issuer’s regular audits. “We have KYC procedures, and we have AML mechanisms embedded into our infrastructure. We do not violate any Financial Action Task Force principles.”

But here is the catch: A7A5’s issuing and affiliated entities, Old Vector LLC and A7 LLC, and the bank that holds the reserves, Promsvyazbank (PSB), are sanctioned by the U.S. Department of the Treasury, barring the U.S. dollar-denominated financial world from interacting with them.

So while the company’s affiliates are restricted by the U.S (whose laws underpin a majority of the global trade), being used by Russian companies to avoid sanctions is not a crime in Kyrgyzstan (where A7A5 is based) or in Russia.

A7A5 facilitates cross-border payments for Russian users facing banking restrictions, while also providing a route into USDT liquidity, the market leader, through decentralized finance (DeFi) protocols without holding dollar stablecoins directly.

In fact, the restriction became one of the driving forces behind the stablecoin’s surprising growth. It added almost $90 billion in circulating supply last year, outpacing USDT, which added $49 billion, and Circle’s USDC, which added about $31 billion, according to data from Artemis.

Going beyond sanctions

Ogienko admitted that life under sanctions puts pressure on people and limits access to some Western goods and services.

However, he argued that it has not stopped business activity or cross-border trade, describing the restrictions as an obstacle rather than an economic dead end and creating a market where A7A5 is in demand.

Ogienko said A7A5’s primary demand comes from businesses in Asia, Africa, and South America that trade with Russian exporters and importers and need cross-border payment mechanisms.

Right now, liquidity is limited because centralized exchanges won’t list the token due to the risk of secondary sanctions. DeFi liquidity pools exist where A7A5 can be swapped for USDT, though A7A5’s own dashboard says only around USDT 50,000 is available.

Ogienko says he was on the ground in Hong Kong trying to fix that, using the trip to Consensus to meet with exchanges and other blockchains — declining to name specifics — to build partnerships.

“We’ve been deployed on Tron and Ethereum, and now we are thinking about deploying on some other blockchains … we’re here to do cooperation with them,” he said.

While the firm wasn’t a sponsor at Consensus, having a U.S.-sanctioned entity at any conference could make organizers and sponsors nervous, even when its sponsorships are technically legal in some regions. This played out at Token2049 in Singapore — where A7A5 was a sponsor, organized by Hong Kong-registered BOB Group — a jurisdiction with no sanctions on Russia. BOB, however, later scrubbed references to A7A5 from the lists, after worries emerged from other sponsors.

Still, the sanctions and the politics surrounding the restrictions don’t bother Ogienko’s ambition to grow his business.

“We think that we can make the trade volumes settled in A7A5 grow … we hope that we can do more than 20% of Russia’s trade settlements with different countries in A7A5,” he said.

However, A7A5 still can’t be used in Russia, as lawmakers are still drafting stablecoin regulations.

Ogienko said that he is in contact with authorities in the country, describing the relationship as consultative and focused on blockchain regulation and financial infrastructure rather than direct government control.

“We’re not politicians. We are traders. We are businessmen,” he said, emphasizing neutrality. “We’re open for business cooperation with any country.”

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