The Big Shor: A7 and the Illusion of Russian Financial Innovation
Over the course of its four-year war in Ukraine, Russia has increasingly struggled to pay for the goods and material required to sustain its combat operations and wider economy. Cut off from the SWIFT messaging system and an ever-dwindling cast of banks willing to process payments, Russia required a workaround.
A7 is one of Russia's most ambitious attempts to do so. Backed by the Russian state, A7 is operated by Ilan Shor, a Moldovan fugitive responsible for a billion-dollar bank heist in 2014.
While publicly billed as an illicit cryptocurrency operation, thousands of previously unseen documents obtained by OSC reveal that the A7 Network has in fact relied heavily on traditional banking, likely moving tens of billions of dollars through the international financial system, largely unnoticed.
This investigation, in partnership with TRM Labs, sheds light on the methods and mechanisms used by A7 to process payments on behalf of Russian companies for goods the country needs to sustain its war of aggression and straining economy.
Shor has labelled the enterprise as “pretty much invulnerable” but its reliance on the very system it seeks to circumvent belies this claim. It has also been heavily dependent on permissive jurisdictions with Kyrgyzstan acting as a major hub for its sanctions breaching activities.
By leveraging the state-owned Trading Company of the Kyrgyz Republic (TKKR), the A7 Network maintained access to the world's major currencies, largest banks and payment channels via Bishkek, all with top cover from Kyrgyzstan's senior politicians.
Its comparable front companies in Hong Kong, Hungary, Mongolia and the UAE have broadened the network's global footprint, giving Russian companies - including sanctioned military entities - the ability to pay suppliers on almost every continent on Earth.
However, its reliance on the existing financial system from which Russia was ostensibly barred means that it is still inherently vulnerable to disruption.