Kyrgyzstan's President Sadyr Japarov has reached out to leaders in the US and UK following UK sanctions targeting Kyrgyz crypto networks associated with the rouble-pegged stablecoin A7A5. These sanctions, imposed due to concerns over facilitating Russian sanctions evasion, include restrictions on four Kyrgyz firms such as crypto exchanges Grinex and Meer. Over the past few years, Kyrgyzstan has evolved into a vital hub for Russian trade and crypto transactions. Since the invasion of Ukraine, bilateral trade between Kyrgyzstan and Russia surged to $3.5 billion, with a significant influx of Russian investment. The UK’s sanctions highlight a suspicion that Kyrgyz exchanges emulate the defunct Russian Garantex, accused of facilitating illicit financial activities. Analysts suggest that many Kyrgyz exchanges display similar patterns indicative of coordinating within Russia’s sanctioned financial landscape. Japarov criticized the politicization of the economy, emphasizing that sanctions disrupt Kyrgyz businesses and the nation’s budding crypto sector, which has expanded rapidly with new licenses for virtual asset service providers since the onset of the war in Ukraine.

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