Georgia, Cryptocurrency and Sanctions: How a British Schoolboy Uncovered Russia's Shadow Network

Georgia has found itself at the center of a major cryptocurrency scandal: European authorities suspect registered platforms in the country of assisting Moscow in circumventing restrictions, and the investigation by 17-year-old Alexander Browder has unexpectedly become part of a larger story about sanctions related to Russia's invasion of Ukraine, money laundering, and gray payment channels.

Several narratives have converged around the Georgian crypto market in a short time. The UK has imposed sanctions against companies linked to the Russian payment network A7. The European Union is preparing new measures against crypto platforms registered in Georgia. In the country itself, authorities report investigations, international operations, and a crackdown on mining in Svaneti, where free electricity has long become fuel for the extraction of digital assets.

A special twist to this story was added by Alexander Browder, the son of William Browder, the initiator of the American Magnitsky Act. The British schoolboy studied the schemes through which, according to his data, Russia and other sanctioned regimes transferred money via cryptocurrency. After this, Moscow banned him from entering the country.

London and Brussels Target Georgian Crypto Platforms

In the near future, the European Union intends to include Georgian cryptocurrency platforms in the 21st package of restrictions against Russia. According to the Financial Times, Europe believes that some companies registered in Georgia may have helped Moscow circumvent financial barriers.

Not long before this, at the end of May, the UK had already imposed strict measures against crypto platforms linked to the Russian payment network A7. The Foreign Office claims that this infrastructure was used to support the Russian military economy.

Over the past year, more than $90 billion passed through the A7 network. This is about half of Russia's annual military spending.

Eighteen structures of different types and jurisdictions fell under British sanctions:

• Crypto platforms.
• Banks.
• Financial networks.
• Countries and jurisdictions where these structures operated: Russia, the UK, Georgia, Kyrgyzstan, UAE, Panama, and El Salvador.

London labeled them as shadow financial systems used to circumvent anti-Russian measures. The assets of these organizations have been frozen, and British companies are prohibited from doing business with them.

Among the Georgian participants in the sanctions list, Arvix LLC, Rapira Group LLC, and Aifory LLC were specifically highlighted. British authorities believe that these structures managed exchanges focused on the Russian market and attempted to circumvent sanctions.

In a broader context, this story fits into a chain of measures that did not start yesterday: sanctions against Russia (2014) after the annexation of Crimea, subsequent packages of restrictions, OFAC decisions, and European regulators gradually pushed Russian financial flows out of the classical banking system. Against this backdrop, cryptocurrency became a convenient tool for those seeking bypass routes.

Essentially, the scheme revolves around several links: the service accepts cash or bank transfers, converts them into digital assets, and then helps withdraw funds through other jurisdictions. For Russian clients, this became a bypass route where ordinary banking channels hit sanction restrictions. In regulatory terminology, such market participants are classified as VASP, or Virtual Asset Service Providers. This approach is used in various countries, including the practice that the National Bank of Ukraine relies on when describing risks in the digital financial sector.

How Alexander Browder Came Across the Cryptocurrency Scheme

A 17-year-old Alexander Brauder played a crucial role in uncovering the network. He prepared a study for the Henry Jackson Society analytical center, describing how illegal payments pass through the cryptocurrency infrastructure.

Brauder paid special attention to the A7A5 stablecoin, backed by the ruble. According to his assessment, this tool has become one of the most serious problems for the West in combating the financial schemes of sanctioned regimes. Brauder claimed that Russia, Iran, and North Korea could have laundered about $350 billion through such mechanisms.

When it became known that the British government had consulted with Alexander Brauder, Moscow responded with a travel ban. On June 2, the Russian Foreign Ministry announced that the schoolboy and three other British citizens were prohibited from entering the country. The formal reason cited was "slanderous fabrications and false information."

"I am proud to be the first schoolboy in the world to be placed on a sanctions list by an authoritarian regime for exposing corruption. I found their Achilles' heel. Without A7A5, they would not be able to finance their aggressive war."

Thus, Alexander Brauder transformed from an author of an analytical report into a participant in an international sanctions conflict. For Moscow, his work became a reason for a demonstrative reaction, while for London, it served as an additional argument for pressuring the shadow crypto infrastructure.

What is known about Georgian companies on the sanctions list

Data on Georgian companies from the sanctions list can be more conveniently compared across several parameters.

• Rapira Group LLC --- registration: Georgia, November 2022; owner and liquidator: British citizen Ilya Akhaev; activities: office in Moscow, working with the Russian crypto market, converting rubles into digital assets, direct transactions exceeding $72 million with Grinex; status: British sanctions, Georgian investigation, liquidation; in late 2025, Russian security forces conducted a search at the company's Moscow office in a case of alleged capital withdrawal.
• Aifory LLC --- registration: Georgia, June 2023; director and sole owner: Georgian citizen Mikhail Gevorkyan; activities: cash-to-cryptocurrency exchange in Moscow, Dubai, and Turkey, virtual cards linked to USDT, intermediary payments between Russia and other countries, part of operations with Iranian crypto exchanges; status: British sanctions and Georgian investigation.
• Arvix LLC --- registration: Georgia, October 2023; director and sole owner: Georgian citizen Tamaz Garaev; activities: according to British authorities, participation in the same network that attempted to weaken financial restrictions against Russia; status: British sanctions and Georgian investigation.

Blockchain in such schemes simultaneously helps transfer funds and leaves traces that analysts can use to reconstruct transaction chains. This is why platforms dealing with large flows are increasingly coming under the scrutiny of sanctioning authorities.

Tbilisi stated that the investigation was already underway

The day after the British announcement, Tbilisi made it clear that the sanctions were not a surprise. The investigative service of the Georgian Ministry of Finance stated that Aifory, Arvix, and Rapira Group had already been subjects of investigation.

According to the Georgian investigation, Aifory and Arvix registered under fictitious names for money. Allegedly, they had neither offices nor assets in Georgia. The Rapira Group, as investigators claim, was registered by a British citizen via power of attorney, did not conduct any operations on accounts, and also lacked offices or assets in the country. The company served clients from Russia through a website with a Russian registrar.

The Ministry of Finance reported that on April 28, 2026, a month before the British sanctions, the court had already made a decision in this case. Two company executives were fined 30,000 lari, which is about 10,000 dollars. The organizer of the fraudulent scheme was named by the investigation as David Jinchaladze; he was sentenced to 9.5 years in actual imprisonment.

Georgian authorities emphasized that they continue to work with international partners on cases of circumventing sanctions. At the same time, Tbilisi specifically noted that the illegal transactions were allegedly identified by the National Bank of Georgia, after which the information was passed on to the British side.

This raised a logical question from the opposition: why did the public not learn about such a high-profile investigation earlier? The Speaker of Parliament, Shalva Papuashvili, answered evasively to a direct question about whether the National Bank of Georgia had provided data to London, stating that he does not know exactly what the communication was like.

International Operation Against Cryptocurrency Mixer AudiA6

At the same time, Georgian law enforcement reported on a large international operation. On June 11, the Prosecutor General's Office, the Ministry of Internal Affairs, and the Ministry of Finance of Georgia announced the dismantling of a network that had been laundering illegal proceeds through cryptocurrency since 2022. The volume of legalized assets is estimated at several hundred million dollars.

The investigation centered around the AudiA6 platform. This is a cryptocurrency mixer: a service that helps obscure the traces of suspicious cryptocurrency transfers for a high fee.

It is assumed that through AudiA6, 9.5 million dollars, stolen from more than 50 users through a fake Ledger Live application, could have been legalized in April 2026.

Ledger Live is a program for managing virtual wallets. The fraudsters managed to place a fake application in the official Apple store, bypassing verification mechanisms. Through it, users lost funds, and then the money was allegedly attempted to be withdrawn through the mixer, according to investigators.

The same criminal group, according to the investigation, managed the Dark2Web forum, where cybercriminals from different countries offered their services.

The operation was coordinated by Europol and Eurojust. Along with Georgian investigators, employees of the U.S. Secret Service, the Central Bureau for Combating Cybercrime of Poland, and the prosecutor's office of the city of Łódź worked together.

In Georgia, about 100 investigators and operatives conducted searches and seized property from the alleged participants in the scheme:

• Searches took place in homes, offices, and vehicles at dozens of addresses;
• Two foreigners were detained in Adjara;
• Electronic media and documents were seized;
• 173 vehicles were arrested;
• Expensive real estate was seized;
• Money in bank accounts was arrested.

Why the Georgian Market Became Convenient for Mining

In Georgia, income from the sale of cryptocurrency is not taxed, and operations with digital assets are legal. Large-scale industrial mining operates not only on private farms but also in free industrial zones—primarily in Gldani, a district of Tbilisi, and in Kutaisi.

Residents of such zones benefit from a special tax regime. For permitted activities within the zone, there is an exemption from profit tax, VAT on operations within the zone, property tax, and import duties. The Tbilisi Free Industrial Zone explicitly mentions the supply of electricity without VAT among its advantages.

The Gldani mining hub grew around the Bitfury project. In 2015, the company acquired 18 hectares of land in Gldani for a symbolic price. The territory was granted the status of a free industrial zone, and in 2016, a data center with a capacity of 40 megawatts was established there.

In Georgian political disputes, the Bitfury project is often linked to the circle of Bidzina Ivanishvili, whom opponents call the shadow ruler of the country. It is known that the Georgian Co-Investment Fund, established by Ivanishvili, issued a loan of $10 million to Bitfury for the first data center in Gori in 2014. Later, Forbes Georgia reported that the fund does not own shares in any of Bitfury's data centers.

Svaneti: Free Electricity and Mining in the Mountains

Against the backdrop of a developed crypto infrastructure, the authorities unexpectedly decided to focus on Svaneti. This high-altitude region has long lived under a special energy regime: local residents have officially not paid for electricity for over 20 years.

The reasons for such a privilege are simple and politically sensitive. On one hand, it concerns the poverty of mountainous areas. On the other hand, the authorities have long avoided conflict with local residents over the installation of meters.

Initially, free electricity was intended to help develop tourism. However, residents found a more profitable application for it. It is believed that today there are about 10,000 devices for cryptocurrency mining operating in the region.

Thanks to liberal regulations, Georgia ranks first in the South Caucasus and is among the top 10 countries in the world for mining accessibility. However, in Svaneti, this has led to problems for tourism, energy, and the country's economy.

Experts estimate the normal annual consumption of the region at 7-10 million kWh. Actual figures are several times higher.

According to Energo-Pro Georgia, in 2020, the local municipality consumed 91.1 million kWh of electricity, and by 2025, this figure is expected to reach 132.9 million kWh.

The energy networks cannot withstand such a load. Power outages in the Svan mountains have become a common problem.

Four years ago, when the situation became critical, a nearly symbolic event took place in Mestia. Hundreds of Svans gathered at the St. George Church and, following community tradition, swore on the icon to shut down the miners. In the past, such a ritual could stop even blood feuds, but the cryptocurrency economy proved stronger: the extraction of digital assets in the region continued.

Recently, the government of the "Georgian Dream" announced that miners in Svaneti cause damage to the energy system amounting to 20-25 million lari annually, which is approximately 8 million dollars. After this, the authorities declared war on mining, and police special forces were sent to Mestia to seize equipment.

The opposition did not believe in the authorities' determination. Critics demand to name specific patrons of Svan crypto farms and consider the raids ineffective. They remind that mining exists in other regions as well, and link the current campaign more to internal struggles among influence groups in the "Georgian Dream" than to a genuine attempt to restore order.