The package represents one of the UK's most expansive crypto-focussed sanctions actions to date and marks the first application of Regulation 17A to crypto asset exchanges. The measures came into force immediately.

Key targets

The designations focus on two principal categories of sanctions evasion infrastructure:

• The A7 Network. The A7 network is a Kremlin-backed system which the UK FCDO described as being designed to bypass Western sanctions, finance military procurement, and process funds from the sale of oil to fund Russia's war economy. The network claimed to have moved more than US$90 billion last year - equivalent to roughly half of Russia's yearly military expenditure. The package targets key A7-linked individuals who are said to be using a Kyrgyz bank suspected of facilitating payments for the network.
• Crypto asset exchanges. The designations also hit major global cryptocurrency exchanges that the UK Government has stated have channelled over US$1.5 billion to Russia. Three Georgian companies operating Russia-focussed exchanges seeking to evade sanctions are also targeted.

The most prominent of the new exchanges listed being:

• EXMO Exchange Limited, operating through EXMO.com and EXMO.me
• Nueva Crytologia, S.A.S. de C.V. of El Salvador, operating as ABCeX through abcex.io
• ARVIX LLC of the Republic of Georgia, operating through arvix.pro and exnode.ru
• Rapira Group LLC of the Republic of Georgia, operating through rapira.io (and other derivations)
• Alistera Limited / Alistair Limited with operations in Russia and operating through alistera.ru
• Bitpapa IC FZC LLC of Ajman, UAE operating through bitpapa.com and bitpapa.org
• Aifory LLC of the Republic of Georgia
• HUOBI Global S.A. of Panama, operating as HTX and operating htx.com

UK/UKOT-connected persons holding crypto assets through designated exchanges should seek legal advice in relation to their holdings to understand the implications of these new sanctions.

Wider context

The UK Government has stated that these measures demonstrate it is "moving faster and further than ever before" to clamp down on these routes and adapt its approach to stay ahead of suspected Russian evasion. To date, the UK has sanctioned over 3,300 individuals, businesses, and ships, with Russia's war economy having lost over US$450 billion due to international sanctions.

Practical significance

• The package represents a notable shift in the UK's sanctions enforcement, moving to directly designate cryptocurrency infrastructure used for sanctions circumvention.
• The simultaneous targeting of the A7 network's corporate structure, its banking conduit in Kyrgyzstan, and the crypto exchanges facilitating its flows reflects an end-to-end approach aimed at dismantling the full payment chain, rather than individual nodes.
• Compliance teams at UK-regulated financial institutions should promptly screen counterparties and transaction flows against the updated UK Sanctions List, which now includes the 18 newly designated persons – including the prominent exchanges named above.
• The UK has indicated it is leading international efforts to disrupt these financial networks, working with allies to protect the integrity of the international financial system. Firms with cross-border exposure should therefore anticipate coordinated designations from allied jurisdictions.
• The full list of designations is available on the UK Sanctions List.

UK’s press release can be found here and the sanctions Notice here