AI, Cryptocurrency, and Shell Companies: How A7 Procures Components for Russian Defense Industry

Russian financial company A7 has developed an extensive network of shell companies that allows Russia to circumvent Western sanctions and procure goods for its defense industry.

The New York Times reported this, citing leaked internal company documents and an analysis of its software.

A7 was established in 2024 by Moldovan-Israeli oligarch Ilan Shor together with the sanctioned Russian Promsvyazbank PJSC. According to Western intelligence agencies, Shor oversees these activities under the direct command of the Russian presidential administration.

Kyrgyzstan served as the main financial hub for A7’s schemes for a long time. More than $100 million in U.S. dollars and Chinese yuan flowed through the bank accounts of local shell companies.

To evade international scrutiny, A7 developed a dedicated AI-powered system that automatically forged invoices and customs documents. Instead of dual-use electronics, the documents listed civilian goods such as car mats or light boxes.

In the first four months of 2025 alone, the company processed more than $500 million in prohibited transactions. More than $130 million of that went toward procuring products for Russia’s defense industry.

Among the purchased goods was steelmaking equipment from China’s Xi’an Heavy Equipment, which is used in the production of shells and armor. Payments were also made for Nvidia servers for AI development and video components for Walksnail drones.

A7 obtained foreign currency for international transactions by transferring Gazprom’s revenues from gas sales in the UAE. The funds were converted into U.S. dollars, euros, and the Tether stablecoin.

Overall, the company claims to handle one-fifth of Russia’s annual foreign trade turnover, amounting to approximately $130 billion.

After Kyrgyz authorities closed the accounts of several shell companies under Western pressure, A7 quickly shifted its operations to other jurisdictions. Journalists identified at least 71 affiliated companies in the UAE, Bahrain, Nigeria, Qatar, and Mongolia.

Despite the imposition of sanctions on Shor and affiliated entities, the scheme remains highly flexible and continues to operate through the constant creation of new legal entities.

It is worth noting that Chinese state-owned company Jilin Chemical Fiber Group supplied raw materials to Russia’s defense industry for the production of strike drones.