"I am proud to be the first school student in the world sanctioned by an authoritarian regime"
The Cryptocurrency Case
Georgia is in the throes of a crypto uproar. British school student Alexander Browder exposed an entire network of cryptocurrency platforms allegedly used by Russia to circumvent sanctions. Georgian crypto exchanges, it turned out, played no small part in the scheme. To make matters worse for Tbilisi, the meticulous teenager is the son of William Browder — the financier behind the Magnitsky Act. Russia swiftly imposed sanctions on the boy, accusing him of tarnishing the country’s image on the international stage.
Meanwhile, Georgia is trying to rehabilitate its crypto reputation in the eyes of the West while tightening control over its domestic crypto market. Alongside a successful joint operation with European law enforcement agencies that dismantled a cybercrime network based in Adjara, the authorities have also set out to crack down on the freewheeling crypto scene in Svaneti. Local residents swear before icons that they have given up mining — yet many continue nonetheless.
Iya Barateli pieced together the fragments of this crypto detective story.
A report by Novaya Gazeta Europe.
New Sanctions for Georgia From London and Brussels
In the coming days, the European Union is expected to include several Georgian cryptocurrency platforms in its 21st package of sanctions against Russia. The move was first reported by the Financial Times, which said that European officials suspect a number of crypto companies registered in Georgia of helping Moscow circumvent Western sanctions.
Earlier, in late May, the British government imposed sweeping sanctions on cryptocurrency platforms linked to the Russian payment network A7, which, according to the Foreign Office, had been used to support Russia’s wartime economy.
More than $90 billion passed through the network last year alone — an amount equivalent to roughly half of Russia’s annual military spending.
London Imposes Sanctions on 18 Financial Platforms Across Multiple Jurisdictions
London has imposed sanctions on 18 platforms — including cryptocurrency exchanges, banks, and financial networks operating in Russia, the United Kingdom, Georgia, Kyrgyzstan, the United Arab Emirates, Panama, and El Salvador — which, according to a statement from the UK Foreign Office, were used as “shadow financial systems” to bypass sanctions on Russia.
The assets of the designated companies have been frozen, and British entities have been instructed to cease all cooperation with them.
Three Georgian crypto exchanges were included in the sanctions list: Arvix LLC, Rapira Group LLC, and Aifory LLC.
“We are also taking action against three Georgian companies that operate Russia-focused exchanges and are attempting to circumvent sanctions,” the UK government said in its statement.
The exposure of the Russian shadow crypto laundering network was aided by a 17-year-old British school student, Alexander Browder. He is the son of prominent British financier William Browder, the main initiator of the Magnitsky Act, adopted by the United States in 2012, which introduced visa and financial restrictions on senior Russian officials implicated in human rights violations.
Earlier in March, Alexander Browder published a report for the Henry Jackson Society think tank outlining illicit schemes for moving funds through cryptocurrency networks. In it, he argued that a ruble-backed stablecoin known as A7A5 represents “one of the most serious challenges facing the West” in efforts to combat sanctions-related money laundering.
According to Browder, several countries — including Russia, Iran, and North Korea — have laundered approximately $350 billion through such channels.
After it emerged that the British government had consulted Browder, Russia’s Foreign Ministry announced retaliatory measures. On June 2, officials in Moscow said they were banning Alexander Browder and four other British citizens from entering Russia, citing “defamatory claims and false information.”
“Any attempts by British political elites to incite Russophobia, deliberately damage our country’s international image, and expand anti-Russian sanctions will be met with resolute countermeasures,” Russia’s Foreign Ministry said.
The British school student, however, signaled in posts on X that the travel ban imposed by Russia does not concern him.
“I am proud to be the first school student in the world placed on a sanctions list by an authoritarian regime for exposing corruption,” he wrote. “I identified their Achilles’ heel. Without A7A5, they would not be able to finance their aggressive war.”
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What is known about the Georgian companies that have been sanctioned?
According to JAM News, the Rapira group of companies is most frequently cited in international analytical reports. Founded in November 2022, the company is currently in liquidation. Its owner and liquidator is listed as British citizen Ilya Akhaev.
The blockchain analytics firm Elliptic states that Rapira was registered in Georgia but also maintained an office in Moscow and actively cooperated with Russia’s cryptocurrency market. The company provided services converting rubles into cryptocurrency, enabling Russian companies and individuals to bypass international banking restrictions.
Rapira is reported to have conducted direct transactions exceeding $72 million with Grinex, a platform previously linked by Western authorities to sanctions-evasion schemes. In late 2025, Russian law enforcement agencies also reportedly searched Rapira’s Moscow office in connection with suspected capital outflows.
Aifory was registered in Georgia in June 2023. According to the business registry, its director and sole owner is Georgian citizen Mikheil Gevorkian. The company operated in Moscow, Dubai, and Turkey, offering cash-to-cryptocurrency conversion services as well as USDT-linked virtual cards that could be used on Western online platforms restricted in Russia.
Reports indicate that Aifory also facilitated intermediary payment services between Russia and other countries, with some transactions linked to Iranian cryptocurrency exchanges.
Arvix was registered in Georgia in October 2023. According to business registry data, its director and sole owner is Georgian citizen Tamaz Garaev. UK authorities say the company was part of the same network allegedly attempting to weaken financial restrictions imposed on Russia.
Reaction to the Sanctions: Fast, but Still Late
Already the day after the United Kingdom announced sanctions, officials in Tbilisi signaled that they were not only unsurprised — they had, in fact, already taken action.
Georgia’s Investigative Service of the Ministry of Finance issued an official statement saying that the companies Aifory, Arvix, and Rapira Group had already been under investigation. The inquiry concluded that Aifory and Arvix had been registered through nominee owners in exchange for payment, and that neither company maintained offices or assets in Georgia.
As for Rapira Group, investigators said the company had been registered by a British citizen via power of attorney, but no financial transactions were recorded on its accounts, and it likewise had no offices or assets in Georgia. According to the findings, Rapira served exclusively Russian clients through the website rapira.net, using a Russian registrar.
The Ministry of Finance reported that more than a month before the sanctions were introduced — on April 28, 2026 — a court decision had already been issued in the case. According to the ruling, two company executives were fined 30,000 lari (about $10,000), while the alleged organizer of the fraudulent scheme, a man identified as Davit Jinchardze, was sentenced to 9.5 years in prison.
In its statement, the Ministry emphasized that Georgia continues to cooperate with international partners on cases related to sanctions evasion. It also said that illicit transactions had been detected by the National Bank of Georgia itself — not by a British teenager — and that the British side had been informed accordingly.
Nevertheless, the opposition has raised a number of questions, primarily over why the investigative authorities did not publicly disclose the case earlier, given its significance. Parliament Speaker Shalva Papuashvili appeared caught off guard by journalists’ inquiries. “I do not know exactly what communication took place,” he said evasively when asked directly whether the National Bank of Georgia had provided London with information about money laundering in support of Russia.
New Police Operation
Meanwhile, some level of communication with European counterparts clearly took place, and not all credit is likely to go to the British teenage crypto whistleblower.
On June 11, Georgia’s Prosecutor General’s Office, Interior Ministry, and Ministry of Finance reported their participation in a large-scale international operation aimed at dismantling a network that has been operating since 2022 to launder illicit funds through cryptocurrency. The volume of laundered assets is estimated at several hundred million dollars.
The case centers on a platform known as AudiA6 — a so-called “crypto mixer” that, in exchange for high fees, obscures the trail of suspicious cryptocurrency transactions.
It is believed that as much as $9.5 million was laundered through AudiA6 in April 2026 — funds allegedly stolen from more than 50 users via a fraudulent application impersonating Ledger Live.
The software in question is designed for managing cryptocurrency wallets, but was reportedly distributed by scammers through Apple’s official app marketplace after bypassing its verification systems.
In addition, the criminal group is said to operate an online forum known as Dark2Web, where cybercriminals from different countries advertise and exchange illicit services.
Coordination of the operation was led by EU agencies Europol and Eurojust. Alongside Georgian investigators, the effort involved officers from the United States Secret Service, Poland’s Central Cybercrime Bureau, and the District Prosecutor’s Office in Łódź.
According to official data, around 100 investigators and operational officers conducted searches across dozens of locations in Georgia, including residential homes, offices, and vehicles. Two foreign nationals were detained in Adjara, though their citizenship has not been disclosed. Electronic devices and documentation were seized.
Authorities also froze assets believed to belong to members of the network, acquired in an effort to launder proceeds of crime. These include 173 vehicles, high-value real estate, and funds held in bank accounts.
Crypto from the Svaneti Mountains
In Georgia, income from cryptocurrency sales is not taxed, and operations with digital assets are fully legal. Large-scale industrial mining is concentrated not only in private facilities but also in free industrial zones, primarily in Gldani (a district of Tbilisi) and Kutaisi.
Residents of these zones operate under a special tax regime: for permitted activities within the zone, they are exempt from corporate profit tax, VAT on intra-zone transactions, property tax, and import duties. The Tbilisi Free Industrial Zone also highlights as an advantage the provision of electricity without VAT.
The Gldani hub developed around the Bitfury project. In 2015, the company received 18 hectares of land in Gldani at a symbolic price, and the area was granted free industrial zone status. By 2016, a 40-megawatt data center had been built there.
The Bitfury project has been linked in Georgia’s political discourse to the circle of the country’s informal power broker, Bidzina Ivanishvili. It is known that the Georgian Co-Investment Fund, established by Ivanishvili, provided Bitfury with a $10 million loan in 2014 for its first data center in Gori. However, Forbes Georgia later reported that the fund does not hold equity stakes in any of Bitfury’s data centers.
Against this relatively stable crypto backdrop, authorities have now decided to address, for the first time in years, the surging scale of mining activity in Svaneti.
Residents of this small but strikingly scenic high-mountain region of Georgia have, for more than two decades, officially benefited from electricity subsidies — effectively paying nothing for power. This arrangement has been attributed both to widespread poverty among mountain communities and to the authorities’ reluctance to strain relations with locals over the installation of electricity meters.
The subsidies were originally intended to support the development of tourism in Svaneti. Instead, many local residents found an even more profitable use for free electricity. It is estimated that today around 10,000 crypto mining devices operate in the region.
Thanks to liberal regulations, Georgia now ranks first in the South Caucasus and among the top ten countries globally in terms of ease of access to cryptocurrency mining. However, the widespread abuse of mining privileges in Svaneti has begun to take a toll on local tourism as well as the country’s broader economy.
According to experts, under normal conditions electricity consumption in Svaneti should not exceed 7–10 million kWh per year. In reality, however, usage is many times higher.
Data from Energo-Pro Georgia shows that in 2020 the municipality consumed 91.1 million kWh of electricity, rising to 132.9 million kWh in 2025.
The power grid is unable to withstand such overload, making blackouts a routine problem in the Svaneti mountains.
Four years ago, when the situation became critical, Mestia — the administrative center of Svaneti — witnessed one of the most unusual protests in the history of cryptocurrency. Hundreds of Svan residents gathered in the Church of St. George to swear on an icon, in accordance with local custom, that they would shut down mining rigs.
While this ritual in earlier times was known to halt even cycles of blood feuds, it proved ineffective against crypto mining. The activity in the mountains of Svaneti has continued to thrive.
However, in recent days, the government of Georgian Dream has abruptly sounded the alarm, announcing that miners in Svaneti are effectively draining the energy system of between 20 and 25 million lari (about $8 million) annually.
In response, authorities declared war on illegal mining, sending police special forces to Mestia to confiscate equipment from local residents.
The opposition, however, has expressed skepticism about the government’s determination, demanding that officials disclose the names and identities of those allegedly protecting Svaneti’s crypto farms. Critics argue that the raids are unlikely to be effective, pointing out that mining activity exists in other regions as well. They also view the initiative as a symptom of internal clan struggles within Georgian Dream rather than a genuine regulatory crackdown.
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