Putin’s SURPRISE Move: FSB Just Took Control of Russia
In August 2026, a pattern that had been building quietly for months in Moscow became a documented fact rather than speculation: Russia’s domestic security service, the FSB, has effectively become the country’s most powerful institution — more powerful, by some accounts, than the ministries and economic bodies it was once meant to serve. What began as an agency tasked with watching external enemies has turned its focus inward, onto the very elite that has sustained Vladimir Putin’s rule for a quarter-century.
The clearest documentation of this shift came in a Bloomberg report published August 7, which found that as public support for the war erodes, Putin has leaned increasingly on the FSB’s hardline wing to maintain his grip on power. According to sources close to the Kremlin cited in that reporting, the FSB’s Second Department — responsible for internal security and protecting the political order — has been granted authority to investigate nearly anyone in the country, with virtually no external oversight. That is not a routine expansion of law-enforcement power. It functions, in practice, as a state within the state, answerable to no one else in the system.
An Institution No One Can Predict
What makes this structure particularly corrosive, according to analysts tracking it, is its unpredictability. One day a businessman can be among the regime’s most trusted loyalists; the next, he can find himself the subject of a treason investigation. Russian analyst Andrei Kolesnikov has summarized the shift bluntly, describing the FSB as having effectively become the country’s “management company,” reducing the political administration, foreign ministry and economic apparatus to technical staff executing decisions shaped by the security services. Sociologist Elena Koneva has gone further, arguing that this climate of fear now extends beyond the elite into the middle class, since no one can be certain who will be targeted next. Some analysts have compared the moment to the oprichnina — the apparatus of repression Ivan the Terrible built against his own nobility centuries ago.
The clearest public illustration of this reach came on July 29, when the FSB placed Telegram founder Pavel Durov — one of Russia’s most recognizable billionaires — on an international wanted list, alleging the platform was being used to coordinate sabotage and violent acts. Durov, who has lived abroad for years and rejects the charge, says the real trigger was Telegram’s refusal to comply with Russian demands for mass surveillance and censorship. That a figure of Durov’s global stature and wealth can be branded a state enemy essentially overnight sends an unmistakable signal: in today’s Russia, neither money nor past loyalty guarantees immunity.
Durov is far from an isolated case. Reports indicate the FSB’s Second Department has opened treason investigations against dozens of scientists for the offense of attending international conferences, prosecuted at least one pro-war blogger despite his ideological alignment with the state, and overseen the nationalization of private businesses whose assets were subsequently redistributed to loyal figures. By some estimates, the FSB claims to have prevented 308 attacks over the past year, while courts have convicted nearly 1,776 people on related security charges. Over the same period, Putin’s longtime domestic policy chief, Sergei Kiriyenko, is reported to be losing influence — a sign that power inside the Kremlin is shifting decisively from the political and economic wing toward the security wing.
Blood in the Capital
The most visible and violent expression of this internal struggle has been a wave of attacks reaching into the heart of Moscow itself. Over the past two years, senior Russian military officials involved in the war have been targeted on Russian soil, including inside the capital. Most recently, on August 1, an explosion occurred during a senior commander’s birthday celebration at a luxury restaurant in central Moscow, resulting in casualties. Russian authorities have generally attributed these attacks to Ukrainian intelligence, though the supporting evidence is rarely made public.
What matters most for understanding the Kremlin’s internal state, however, may be less who carried out these attacks and more what they have produced inside the system. According to an assessment based on European intelligence following the Moscow attacks, a sharp internal reckoning followed, with the chief of the general staff, the FSB director and the Rosgvardia commander reportedly blaming one another for failing to protect senior figures. The same assessment suggests the FSB has redirected much of its surveillance capacity away from ordinary criminal cases and toward monitoring the government’s own members — meaning Russia’s principal security service is now watching its own administration nearly as intensively as it watches external adversaries. When an intelligence agency devotes significant resources to surveilling its own government, that is a strong indicator that internal trust has already broken down.
The Fall of Putin’s Old Guard
Perhaps no case illustrates the reach of this internal war better than that of former Defense Minister Sergei Shoigu, one of Putin’s longest-serving and most powerful allies before being removed from the ministry in May 2024 and shifted to a less influential post on the Security Council. In November 2025, Russian authorities announced they had foiled an assassination plot against Shoigu in Moscow, allegedly involving a device hidden near his relatives’ graves. While officials attributed the plot to Ukraine, independent observers have noted that the targeting of a once-untouchable figure is difficult to separate from the broader power struggle underway inside the Kremlin — particularly given that Shoigu’s former deputy was arrested in the same period, a move widely read as the breaking of an unwritten immunity agreement long extended to Russia’s elite.
The unease has reached even further into Putin’s inner circle. Dmitry Kozak, one of Putin’s closest associates since the 1990s and the Kremlin’s longtime problem-solver — credited with work ranging from ending the second Chechen war to negotiating the Normandy format on Ukraine — was reportedly the only member of the Security Council to warn against the 2022 invasion, predicting fierce Ukrainian resistance and devastating Western sanctions. In 2025, Kozak presented Putin with a comprehensive reform plan calling for an end to the war, peace negotiations and an independent judiciary, warning that continued isolation would leave Russia technologically behind and alienate younger generations. Putin reportedly rejected the plan and offered Kozak a largely powerless regional post instead; Kozak refused and resigned in September 2025, breaking from a regime he had served for a quarter-century. Security Council Chairman Nikolai Patrushev is also reported to have expressed reservations about the 2022 invasion decision, though he remains on the council in a diminished role. Even Oleg Deripaska, an oligarch generally considered loyal to Putin, has publicly criticized the government’s failure to create a viable investment environment, warning in unusually blunt terms that the coming year cannot be weathered through inertia alone.
Public Opinion Has Already Shifted
The elite’s growing unease is mirrored, and arguably driven, by a broader shift among the Russian public. Independent polling cited in Kremlin-adjacent and outside analyses shows support for continuing the war falling sharply — from 37 percent in December 2024 to just 25 percent a year later, while the share favoring peace rose from 54 percent to 67 percent over the same period. Roughly two out of three Russians polled now say they want the war to end. Putin retains the security capacity to suppress ordinary dissent, control media coverage and contain street protests in the near term. But suppressing public discontent and sustaining a war effort that depends on the active cooperation of his own elite circle are two very different challenges — and it is the latter that appears increasingly precarious.
Nationalization and a Quiet, Accelerating Exodus
Underlying all of this is a collapsing economic bargain. Since 2022, the Kremlin has nationalized assets worth more than 4 trillion rubles — ports, airports, energy firms and food companies, including Moscow’s largest private airport and Russia’s largest pasta producer — largely to close budget gaps as the war enters its fourth year. Business leaders have responded with unprecedented pushback, reportedly sending Putin a letter demanding the nationalizations stop, an act of open defiance rarely seen in his Russia. Even trusted figures like Rosneft chief Igor Sechin no longer appear entirely secure.
The consequence has been a widening flight of capital and people. Bloomberg reported in mid-July, in findings corroborated across other outlets, that Russia’s wealthiest citizens — including longtime Putin associates — have moved billions of dollars abroad over the past year, with the pace accelerating. Destinations include the UAE, Cyprus, Turkey, Saudi Arabia and parts of Africa, with wealth increasingly shifting into cryptocurrency, gold and foreign real estate to avoid detection. Even the Rotenberg brothers, childhood friends of Putin who built vast fortunes on state contracts, have reportedly stopped paying wages to tens of thousands of workers, including in military production, while reportedly moving much of their own wealth abroad.
A Treasury That No Longer Balances
Beneath the political drama sits a stark fiscal reality. Russia’s budget deficit exceeded $75 billion in the first half of this year alone — already 51 percent above the target set for the entire year. Recent government bond auctions have been strikingly unsuccessful, with one raising only 10 percent of its target and two others attracting no buyers at all. Concerns have reportedly spread to the banking sector, with even a Kremlin-aligned think tank warning of signs of a systemic banking crisis. With borrowing increasingly difficult, the state has begun cutting spending on infrastructure, healthcare and regional support — consequences now visible in closed hospital wards and unfinished roads even as wealthy elites relocate billions to Dubai skyscrapers.
None of this guarantees the regime’s collapse. Putin remains in power, and Russia’s security apparatus remains formidable and well-resourced. But a system that increasingly relies on fear rather than loyalty to hold together is, by its nature, more brittle than it appears — and the erosion now visible in the Kremlin’s finances, its elite relationships and its own internal trust suggests a foundation under considerably more strain than its public messaging admits.
