Georgia has found itself at the center of a major cryptocurrency scandal: European authorities suspect platforms registered in the country of helping Moscow circumvent restrictions, and an 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 storylines have converged around the Georgian crypto market in a short time. The United Kingdom 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 fueled the extraction of digital assets.
A special twist in this story was given by Alexander Browder, the son of William Browder, initiator of the American ‘Magnitsky Act.’ The British schoolboy studied 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 bypass financial barriers.
Shortly before this, at the end of May, the United Kingdom had already imposed tough measures against crypto platforms linked to the Russian payment network A7. The Foreign Office claims that this infrastructure supported the Russian military economy.
More than $90 billion passed through the A7 network last year. This is about half of Russia’s annual military spending.
Eighteen entities of various types and jurisdictions fell under British sanctions:
- Crypto platforms.
- Banks.
- Financial networks.
- Countries and jurisdictions where these entities operated: Russia, United Kingdom, Georgia, Kyrgyzstan, UAE, Panama, and El Salvador.
London called them 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 singled out. British authorities believe these entities managed exchanges focused on the Russian market and attempted to circumvent sanctions restrictions.
In a broader context, this story fits into a chain of measures that did not begin 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 traditional banking system. Against this backdrop, cryptocurrency became a convenient tool for those seeking alternative routes.
Essentially, the scheme is built around several links: a 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 workaround where regular banking channels hit sanctions restrictions. In regulatory terminology, such market participants are classified as VASP, that is, virtual asset service providers. This approach is used in various countries, including the practice followed by the National Bank of Ukraine when describing digital financial sector risks.
How Alexander Browder Uncovered the Cryptocurrency Scheme
Seventeen-year-old Alexander Browder played an important role in exposing the network. He prepared a study for the Henry Jackson Society think tank, describing how illegal payments pass through cryptocurrency infrastructure.
Browder paid special attention to the A7A5 stablecoin, backed by the ruble. In his assessment, this tool became one of the most serious problems for the West in combating financial schemes of sanctioned regimes. Browder 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 Browder, Moscow responded with an entry ban. On June 2, the Russian Foreign Ministry announced that the schoolboy and four other British citizens were prohibited from visiting the country. The formal reason was cited as ‘defamatory fabrications and false information.’
I am proud to be the first schoolboy in the world to be included in a sanctions list by an authoritarian regime for exposing corruption. I found their Achilles’ heel. Without A7A5, they could not have financed their aggressive war.
Thus, Alexander Browder turned from the author of an analytical report into a participant in an international sanctions conflict. For Moscow, his work became a reason for a demonstrative reaction, and for London — an additional argument for pressure on the shadow crypto infrastructure.
What Is Known About Georgian Companies on the Sanctions List
It is more convenient to compare data on Georgian companies from the sanctions list by several parameters.
- Rapira Group LLC — registration: Georgia, November 2022; owner and liquidator: UK citizen Ilya Akhaev; activity: office in Moscow, work with the Russian crypto market, conversion of rubles into digital assets, direct transactions of more than $72 million with Grinex; status: British sanctions, Georgian investigation, liquidation; at the end of 2025, Russian law enforcement conducted a search at the company’s Moscow office in connection with an alleged capital outflow case.
- Aifory LLC — registration: Georgia, June 2023; director and sole owner: Georgian citizen Mikhail Gevorkyan; activity: cash-to-crypto 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; activity: according to British authorities, participation in the same network that tried to weaken financial restrictions against Russia; status: British sanctions and Georgian investigation.
In such schemes, blockchain simultaneously helps transfer funds and leaves traces that analysts can use to reconstruct transaction chains. That is why platforms working with large flows are increasingly coming under the scrutiny of sanctions agencies.
Tbilisi Said 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 Georgia’s Ministry of Finance stated that Aifory, Arvix, and Rapira Group were already under investigation.
According to the Georgian investigation, Aifory and Arvix were registered under nominees for money. Allegedly, they had neither offices nor property in Georgia. Rapira Group, investigators claim, was registered by a UK citizen by proxy, did not conduct account operations, and also had no offices or assets in the country. The company served Russian clients through a website with a Russian registrar.
The Ministry of Finance reported that as early as April 28, 2026, that is, a month before the British sanctions, the court had already ruled on this case. Two company executives were fined 30,000 lari, which is about $10,000. The investigation named David Jincharadze as the organizer of the fraudulent scheme; he was sentenced to 9.5 years in prison.
Georgian authorities emphasized that they continue to work with international partners on cases of sanctions evasion. At the same time, Tbilisi specifically noted: allegedly, illegal transactions were identified by the National Bank of Georgia, after which the information was passed to the British side.
The opposition then had a logical question: why did the public not learn about such a high-profile investigation earlier? Parliament Speaker Shalva Papuashvili, when asked directly whether the National Bank of Georgia had provided data to London, answered evasively: he does not know exactly what the communication was.
International Operation Against AudiA6 Crypto Mixer
At the same time, Georgian law enforcement reported a major international operation. On June 11, the Prosecutor General’s Office, Ministry of Internal Affairs, and Ministry of Finance of Georgia announced the exposure of a network that had been laundering illegal proceeds through cryptocurrency since 2022. The volume of laundered assets is estimated at several hundred million dollars.
The focus of the investigation was the AudiA6 platform. This is a crypto mixer: a service that, for a high commission, helps obscure the traces of suspicious cryptocurrency transfers.
It is believed that in April 2026, $9.5 million stolen from more than 50 users through a fake Ledger Live app could have been laundered via AudiA6.
Ledger Live is a program for managing virtual wallets. Fraudsters managed to place a fake app in Apple’s official store, bypassing verification mechanisms. Through it, users lost funds, and then, according to investigators, the money was attempted to be withdrawn through the crypto mixer.
The same criminal group, according to the investigation, ran the Dark2Web forum, where cybercriminals from different countries offered their services.
The operation was coordinated by Europol and Eurojust. US Secret Service officers, Poland’s Central Bureau for Combating Cybercrime, and the Lodz city prosecutor’s office worked with Georgian investigators.
In Georgia, about 100 investigators and operatives conducted searches and seized property of alleged scheme participants:
- searches were conducted in homes, offices, and cars at dozens of addresses;
- two foreigners were detained in Adjara;
- electronic media and documents were seized;
- 173 cars were seized;
- expensive real estate was seized;
- money in bank accounts was seized.
Why the Georgian Market Became Convenient for Mining
In Georgia, income from cryptocurrency sales is not taxed, and transactions 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 exemption from profit tax, VAT on intra-zone transactions, property tax, and import duties. The Tbilisi Free Industrial Zone specifically lists electricity supply without VAT as an advantage.
The Gldani mining hub grew around the Bitfury project. In 2015, the company received 18 hectares of land in Gldani at a symbolic price. The area was granted free industrial zone status, and in 2016, a 40-megawatt data center was built there.
In Georgian political debates, the Bitfury project is often linked to the entourage of Bidzina Ivanishvili, whom opponents call the shadow ruler of the country. It is known that the Georgian Co-Investment Fund, founded by Ivanishvili, in 2014 issued Bitfury a $10 million loan for the first data center in Gori. Later, Forbes Georgia wrote that the fund does not own shares in any of Bitfury’s data centers.
Svaneti: Free Electricity and Mountain Mining
Amid a developed crypto infrastructure, authorities unexpectedly decided to focus on Svaneti. This high-mountain region has long lived under a special energy regime: for more than 20 years, locals have officially not paid for electricity.
The reasons for this benefit are simple and politically sensitive. On one hand, it is about the poverty of mountain areas. On the other, authorities for years did not want to clash with locals over installing meters.
Initially, free electricity was supposed to help develop tourism. But residents found a more profitable use for it. It is believed that about 10,000 devices for cryptocurrency mining now operate in the region.
Thanks to liberal rules, Georgia ranks first in the South Caucasus and is in the global top 10 countries for mining accessibility. But in Svaneti, this has led to problems for tourism, energy, and the country’s economy.
Experts estimate the region’s normal annual consumption 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 in 2025 — already 132.9 million kWh.
The power grid cannot withstand such loads. Power outages in the Svan mountains have become a common problem.
Four years ago, when the situation became critical, a nearly symbolic action took place in Mestia. Hundreds of Svans came to the Church of St. George and, following a community custom, swore on an icon to turn off the miners. In the past, such a ritual could stop even a blood feud, but the cryptocurrency economy proved stronger: digital asset mining in the region continued.
Recently, the ‘Georgian Dream’ government announced that miners in Svaneti cause annual damage to the energy system of 20–25 million lari, or about $8 million. After this, the authorities declared war on mining, and police special forces went to Mestia to seize equipment.
The opposition did not believe in the authorities’ determination. Critics demand to name the 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 ‘Georgian Dream’ factions than to a real attempt to restore order.
{
“@context”: “https://schema.org”,
“@type”: “Article”,
“about”: [
{
“@type”: “Place”,
“name”: “Georgia”
},
{
“@type”: “Place”,
“name”: “Russia”
},
{
“@type”: “Place”,
“name”: “United Kingdom”
},
{
“@type”: “Thing”,
“name”: “cryptocurrency”
},
{
“@type”: “Thing”,
“name”: “money laundering”
},
{
“@type”: “Thing”,
“name”: “blockchain”
},
{
“@type”: “Thing”,
“name”: “sanctions related to Russia’s invasion of Ukraine”
},
{
“@type”: “Thing”,
“name”: “sanctions against Russia”
},
{
“@type”: “Thing”,
“name”: “virtual asset service providers”
},
{
“@type”: “Organization”,
“name”: “OFAC”
}
]
}
