Treasury Launches Assault on Russian Shadow Banking Infrastructure Supporting Iran

Operation Economic Outcast has found a new target: the A7 Network.

On October 1, Treasury’s Office of Foreign Assets Control (OFAC) designated the Russia-linked shadow-banking platform as a transnational criminal organization used by malign actors, including Iran, to evade sanctions. The department’s Financial Crimes Enforcement Network (FinCEN) also proposed a rule that would prohibit U.S. firms from transmitting funds to A7-linked entities, referred to as “Sub-Agents,” and potentially disrupt the network’s operation across what FinCEN says is approximately 435 financial institutions in at least 83 countries, as of June 2026.

Sanctioned Russian state defense bank Promsvyazbank and the fugitive Moldovan oligarch Ilan Shor, with support from Kyrgyzstan’s sanctioned Keremet Bank, helped establish A7 for the specific purpose of evading sanctions. According to FinCEN, the network appears to have processed more than $17 billion from January 2025 through June 2026 in U.S. dollar-denominated transactions. Unlike some sanctions evasion channels which are either unknown to the state or receive its tacit support, FinCEN notes “[t]here are indications that the Russian government perceives the A7 Network to be a strategically important enterprise.”

Shared Enemy, Shared Infrastructure

Russia and Iran are increasingly working to facilitate sanctions-resistant trade. OFAC warned in 2024 that sanctioned Iranian banks had joined Russia’s financial messaging system known as SPFS, while Russia’s Mir and Iran’s Shetab card networks were also linked that year. Later, during Operation Economic Outcast, Treasury redesignated Russia’s second-largest bank, VTB Bank, under an Iran sanctions authority for establishing correspondent relationships with sanctioned Iranian banks.

The overlap extends beyond formal banking channels. Aifory Pro, a Russia-focused crypto service registered in Georgia but operating from Moscow, transferred nearly $2 million in crypto assets to the Iranian exchange Abantether, according to blockchain analysis, and was sanctioned by the United Kingdom and later by the United States.

The growing financial integration between Russia and Iran increasingly reflects deliberate government policy rather than ad hoc commercial adaptation. A 2024-2026 Russian government cooperation roadmap obtained by Fox News called for greater use of national currencies, independent financial messaging channels, and coordination through the BRICS bloc of states — of which both Iran and Russia are members — and other institutions against “unilateral trade restrictions.”

A7’s Sanctions Evasion Relies on Liquidity of U.S. Dollar-Backed Stablecoin

FinCEN noted that the A7 network has used its ruble-backed stablecoin, A7A5, as a “non-freezable” bridge into more liquid digital assets such as Tether’s U.S. dollar-backed stablecoin, USDT, and then into fiat currency through exchanges and over-the-counter (OTC) brokers. USDT is the largest stablecoin in circulation globally and has long been the focus of counter-illicit finance watchdogs. In September, the Senate Permanent Subcommittee on Investigations reported that 84 percent of 846 wallets sanctioned or targeted for seizure because of links to Iran and its proxies had transacted exclusively or nearly exclusively in USDT.

As of September 2026, Tether holds approximately $114.9 billion in U.S. Treasuries, which form the dollar backing for USDT. The El Salvador-based firm periodically cooperates with U.S. law enforcement, freezing over half-a-billion-dollars’ worth of Iran-linked USDT in 2026.  

Target the Permissive Jurisdictions Enabling A7’s Operations

Upon completion of a standard 30-day comment period, FinCEN should move to implement the proposed prohibition on fund transmittals involving A7 Sub-Agents.

Identifying these Sub-Agents is difficult due to the significant degree of obfuscation and financial opacity they employ. Treasury should therefore continue publicly identifying A7-controlled entities and scrutinize the firms servicing them. High-level engagement with regulators in jurisdictions used by A7 — including, but not limited to, Hong Kong, the United Arab Emirates, and Kyrgyzstan — should also be a priority. Treasury should also continue targeting foreign intermediaries serving sanctioned Iranian actors and examine UK-sanctioned firms, including AiFory, Arvix, Rapira Group, and their potential successors, for potential Russia- and Iran-related sanctions designations. Treasury should also consider issuing a warning letter to Tether to ensure the firm enhances its due diligence procedures and protects the integrity of the global financial system.

Max Meizlish is a research fellow for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). Keti Korkiya is a research analyst with FDD’s Russia Program. For more analysis from Max and Keti, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. Follow Max on X @maxmeizlish. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.