In late October 2025, Russia’s political landscape was jolted by dramatic accusations and deepening economic turmoil, signaling a period of mounting instability for President Vladimir Putin’s long-standing regime. The Federal Security Service (FSB) accused exiled oligarch Mikhail Khodorkovsky and 22 members of the Anti-War Committee of Russia of plotting a coup and forming a “terrorist community,” a move that has drawn skepticism from analysts and intensified speculation about the Kremlin’s internal anxieties.
Khodorkovsky, once Russia’s richest man before his arrest and exile, flatly denied the allegations. Speaking to The Telegraph, he described the charges as “more lies from the cabal that surrounds the former KGB Lt. Col.,” emphasizing that there is no conspiracy to topple Putin. The exiled businessman, now residing in London, argued that the real story is the Kremlin’s fear of a power transition. “If Putin dies tomorrow, there is no obvious successor,” Khodorkovsky said, highlighting the regime’s lack of a clear succession plan.
Experts have been quick to dismiss the FSB’s claims as a familiar Kremlin tactic. Dr. Stephen Blank of the Foreign Policy Research Institute told the National Security Journal that Putin has a habit of conjuring up “Phantom Enemies” to reinforce his grip on power. “He always has to have some entity out there that he sells to the Russian public as an existential threat to his regime,” Blank explained. Over the years, this has included NATO, so-called Ukrainian Nazis, and now, exiled opposition figures like Khodorkovsky.
John Herbst, Senior Director of the Eurasia Center at the Atlantic Council and former US ambassador to Ukraine, echoed this view, telling The Telegraph that “the Kremlin is falling into paranoia. Putin is looking for new enemies to secure his regime.” This sentiment was reinforced by Timothy Ash, a senior fellow at Chatham House, who observed, “Russia has finally been hurt for the first time in three and a half years. I think there’s some panic.”
But for all the theatrics of alleged coup plots, analysts agree that the gravest threat to Putin’s rule is not external or conspiratorial—it is economic. Russia’s economy, battered by years of Western sanctions, is now showing unmistakable signs of strain. The Ministry of Economic Development recently warned that the country is “on the verge of recession,” with high interest rates paralyzing business activity and a banking sector under growing stress.
One of the most alarming indicators is the mountain of debt owed by Russian arms manufacturers. According to research cited by The Telegraph and the National Security Journal, about 23% of all outstanding corporate loans—roughly $190 billion, or 37% of the annual state budget—have been issued to military-industrial enterprises. Much of this lending occurred without proper credit checks, raising the specter of mass defaults and a potential banking crisis. Craig Kennedy, of Harvard’s Davis Center for Russian and Eurasian Studies, told The Telegraph, “They were funding the war with borrowed money all along, it just wasn’t showing on the state’s balance sheet. This is just a dark pool of debt, and nobody quite knows how much is going to default once it matures.”
In July 2025, Bloomberg reported that at least three of Russia’s largest banks were quietly preparing requests for bailouts as bad loans piled up. Despite a minor Central Bank rate cut to 16.5% in October, liquidity in the Russian financial system has dried up, with businesses and consumers alike feeling the pinch. The Russian government’s ability to “buy victory” on the battlefield is waning, as runaway military spending and the costs of the war in Ukraine continue to spiral.
The economic pain has been compounded by a series of new US sanctions. On October 22, 2025, President Donald Trump imposed fresh restrictions on Russia’s two largest oil companies, Rosneft and Lukoil, and warned international banks against facilitating Russian oil transactions. These measures, described by The Telegraph as “a particularly painful moment” for the Kremlin, threaten one of Russia’s last major sources of wartime revenue. The United States’ actions have also prompted India and China—once major buyers of Russian oil—to scale back their purchases, further squeezing Moscow’s finances.
Meanwhile, Ukrainian drone strikes on Russian oil refineries have triggered fuel shortages and rising gasoline prices across the country. The combination of these attacks, sanctions, and economic mismanagement has led to what some analysts are calling a “ticking bomb” of bad debt. As Kennedy warned, “The longer they wait, the greater the risk of a crisis, because the debt situation isn’t going to fix itself.”
The Kremlin’s current anxiety is also linked to last year’s failed Wagner Group mutiny, led by Yevgeny Prigozhin. Although the uprising collapsed, it exposed deep divisions within Russia’s power structure and underscored the absence of a clear successor to Putin. Georgetown University professor Angela Stent told The Telegraph that Moscow’s recent actions are part of an effort to reinforce the narrative that “the West is trying to destroy Russia,” a theme that has become central to the regime’s domestic propaganda.
But as political repression intensifies and the economy falters, cracks are beginning to appear in the foundation of Putin’s system. Western economists and analysts cited by The Telegraph warn of rising default risks, a potential banking crisis, and growing public discontent. Even the Russian Ministry of Economic Development has acknowledged the country’s precarious position, warning that recession looms on the horizon.
Despite years of resilience in the face of Western sanctions—thanks in part to forced lending to defense industries and oil exports to Asia—Russia’s options are narrowing. With international buyers turning away and domestic banks groaning under the weight of bad loans, the Kremlin’s ability to weather this storm is in serious doubt.
Khodorkovsky’s dismissal of the coup allegations as a Kremlin distraction rings true for many observers. “What do we have in Russia?” he asked in his interview with The Telegraph. “A prime minister whom no one elected but whom Putin appointed. Courts appointed by Putin. A parliament whose seats were filled through falsified elections, and whose legitimacy no one believes in.”
As October 2025 draws to a close, the sense of crisis in Moscow is palpable. The regime’s reliance on phantom enemies and heavy-handed repression may no longer be enough to mask the economic and political pressures building beneath the surface. For Putin, after a quarter-century in power, the greatest threat may not be exiled dissidents or foreign adversaries—but the unsustainable debts and deepening divisions within his own system.
