From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

Ilan Shor, a fugitive Moldovan businessman, has created another mechanism in Kyrgyzstan to evade Russian sanctions, moving more than $6 billion. The operation includes two state enterprises, three domestic state banks, and a financial institution tied to ex-president Bakiyev.

This is reported in an investigation by the outlet  Kloop.

Previously, according to estimates by the British government, at least another 9.3 billion passed through sanctioned Grinex — Shor’s Kyrgyz crypto exchange. In total, more than 15 billion dollars have passed through Shor’s schemes in Kyrgyzstan.

According to data from a leak of documents from the A7 company group, provided by Osint Romania and the Moldovan publication IPN, the new scheme mentions 42 Kyrgyz companies, and it could not have been done without the help of local authorities.

The money flows through the state-owned “Ayyl Bank,” “Eldik Bank,” “Capital Bank,” and the linked “Eurasian Savings Bank” associated with fugitive president Kurmanbek Bakiyev. The latter two have previously been sanctioned by Europe and the United Kingdom.

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

The scheme also involves owned by the Ministry of Economy JSC “Trading Company of the Kyrgyz Republic,” headed by Nazarbek Zhanyshbek uulu — in August 2025, a person with the same name was sanctioned by the UK for assisting Russia in bypassing restrictions.

The documents also mention JSC “Issuer of Virtual Assets,” which is owned by the Ministry of Finance; however, its specific role in the scheme remains unknown.

At the same time, “Issuer of Virtual Assets” plays a significant role in the development of cryptocurrency in Kyrgyzstan. It issues the state dollar stablecoin USDKG, backed by gold.

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From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

Ilan Shor

Shor’s schemes operate with the first ruble stablecoin A7A5 — a product of Shor’s company “A7.” Despite the fact that in October 2025, companies that created, issued, and traded the stablecoin were sanctioned by Europe, this does not prevent the scheme from continuing to operate.

“Sanctions are something we were prepared for […] there were some negative consequences, which we successfully mitigated and neutralized,” said Oleg Ogienko, Director of Government Relations and International Affairs at A7A5, during an AMA session on YouTube.

He stated that the stablecoin is not involved in money laundering, and the sanctions imposed by “a number of unfriendly countries” were due to “discrimination.”

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

Oleg Ogienko

“They simply used this pretext to include us in sanctions, effectively discriminating against us on national grounds because we are from the Kyrgyz Republic, because we are connected to Russia,” Ogienko is convinced.

At the same time, he does not deny that their products, virtual cards, and promissory notes help bypass sanctions.

“[The company’s products] are in high demand largely in foreign trade, of course, since, as you know, there are currently difficulties with payments, and through A7A5, these payments can be made in digital currency,” the A7A5 top manager explains.

How it works

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

illustration generated by Canva

Kyrgyz companies issue and manage A7A5 tokens, act as intermediaries between the sender and recipient of funds, and also issue and redeem digital promissory notes.

The A7A5 stablecoin operates within the A7 international money transfer system, created by the sanctioned Russian state defense Promsvyazbank. Despite this, it continues to be issued in Kyrgyzstan.

Oleg Ogienko, Director of Government Relations and International Affairs at A7A5, explains that Kyrgyzstan was chosen for its “flexible” legislation.

“If you compare it with euro stablecoins, everything there is heavily regulated in this regard, and it’s not so easy to issue euro stablecoins tied to that jurisdiction. The Kyrgyz Republic is more flexible in this respect,” he says.

Ogienko assures that they operate under strict oversight and “support” from Russian and Kyrgyz government bodies.

“This is an important project in the jurisdiction of Kyrgyzstan […] We have constructive interaction with regulators and governments of both countries. In fact, we are developing the project, and more and more tasks arise that cannot be solved without interaction with regulators,” he says.

One of the intermediary companies used by A7 is JSC “Trading Company of the Kyrgyz Republic.” 100% of its shares are owned by the Ministry of Economy.

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

According to the documents, such legal entities work with currency in Chinese yuan and US dollars and by default transfer money to and from China, Hong Kong, the UAE, and Turkey, but operations can also be conducted to and from other countries by agreement.

Among the intermediary companies is also the commercial LLC “Kifiko,” which was sanctioned by the UK on December 18, 2025, for assisting Russia in bypassing sanctions through the A7 system. It was one of the main counterparty companies in the scheme.

From stablecoins to digital IOUs: how Ilan Shor utilizes Kyrgyz frameworks and national banks to circumvent global sanctions

Ulan Salamatov

The company belongs to Ulan Salamatov, a businessman and former member of the political council of the “Bir Bol” party, which was linked to the family of fugitive president Bakiyev.

The director of “Kifiko,” Barchyn Tyulialieva, is a member of the public council of the State Inspectorate for Environmental and Technical Safety.

Digital Promissory Note

The same “Trading Company of the Kyrgyz Republic” and other Kyrgyz legal entities are also involved in redeeming digital promissory notes.

A digital promissory note is a new A7 product, a security with varying denominations. How does this differ from the intermediary company scheme? There are far fewer digital traces because only the issuer of the document and the final recipient who cashes it are recorded. It’s like a bearer check; it can be transferred to anyone, and anyone can cash it. Tracking the full chain, however, is very difficult. The note can be transferred both physically and virtually through a special application.

“There is the issuance of a note, then this note can somehow be transferred from one person to another, and these operations are not reflected in the blockchain at all and cannot be tracked in the blockchain. In the blockchain, only the operation is reflected when the note is converted back into A7A5 […] The fact of transferring the physical note from one person to another is simply not recorded,” Ogienko explains.

At the same time, it is not necessary to exchange the note for a ruble stablecoin; for its nominal value, one can buy other cryptocurrencies or even receive cash.

As of June 2025, according to internal A7 documentation, the company issued notes worth more than 1.6 trillion rubles (approximately 21.2 billion US dollars). According to the official website, the securities are issued in Kyrgyzstan, but it is unknown how much of this money has passed through the country.