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Sanctions vs. Russia’s Hidden Operations in the Middle East

As the West targets Russian banks, Russia’s covert crypto-based logistics are flourishing in Dubai and Ankara – but can sanctions really halt this flow? While Western efforts focus on major Russian banks and oil shipments, the backbone of Russia’s shadow trade has quietly moved into the digital realm. Its central hub is increasingly in the Middle East. A large share of Russia’s gray-market logistics—including the acquisition of dual-use goods, cryptocurrency transactions, and offshore profit strategies for Russian firms—runs through the United Arab Emirates, Türkiye, Iran, and, to a lesser extent, Lebanon. Read more about this in the article by Bohdan Popov, Head of Digital at the United Ukraine Think Tank, communications specialist and public figure. Firstly, the author explains that Russian IT firms establishing offices in Dubai, Ankara, or Bahrain are increasingly functioning less as software developers and more as “logistics intermediaries” for export operations. They provide fictitious B2B services, act as payment channels for crypto transactions, and sometimes digitally obscure actual trade flows. Through these networks, Russia repackages sanctioned goods—such as chips, drones, and control platforms—and pays for them using cryptocurrency, mixed payment systems, or offshore wallets. “Servicing” companies play a key role in this system. Fintech startups registered in Dubai, for example, leverage APIs from European or Asian payment systems to convert Russian funds into USDT or Dirham, bypassing SWIFT. These firms often present themselves as legal-tech, EdTech, or cybersecurity companies, but their real function is supporting the gray-market logistics of Russian exports. Secondly, Popov emphasizes that following the partial collapse of Russia’s oil and gas monopolies between 2022 and 2024, Moscow heavily invested in developing an alternative financial system—crypto-based logistics. This system relies on a vast network of exchanges, mining pools, P2P wallets, and proxy accounts operating in friendly or neutral jurisdictions. By 2023, as much as 82% of transactions by Russian sanctioned companies flowed through crypto exchanges such as Garantex. After Garantex faced partial U.S. restrictions in 2022–2023, the Kremlin shifted operations to other platforms—some in Iran, some in the UAE, and others in Hong Kong. In 2025, Russia launched A7A5, its shadow central bank digital currency (CBDC). Unlike conventional CBDCs, A7A5 was designed not for a regulated financial market but as a tool to circumvent sanctions and conceal international economic activity. Built on a modified Hyperledger Fabric blockchain with integrated GOST encryption, the system effectively obscures transactions from global blockchain monitoring tools. Finally, the expert summarizes that Russia’s shadow crypto infrastructure is far from a peripheral tool for evading sanctions; it serves as a critical lifeline for gray-market exports and payments for illicit goods. Through this network, Russia sustains access to chips, drones, telecom equipment, and even laser optics. Disrupting this system—not only through SWIFT restrictions or oil sanctions but by targeting digital operations in Türkiye, the UAE, and India—would strike at the very core of Russia’s export machinery. Sanctions against fintech entities operating in gray zones remain an underused instrument. Applied effectively, they could not only shut down crypto exchanges but also dismantle the foundation of Russia’s military-trade networks. Read the full article by Bohdan Popov on The Gaze: Sanctions vs. Russia’s Shadow Schemes in the Middle East Read also: $120 Billion for Ukraine’s Victory: Why 2026 Defense Spending Is an Investment in Global Security The post Sanctions vs. Russia’s Hidden Operations in the Middle East appeared first on Freedom.