A report by TRM Labs indicates that Kyrgyzstan has become a hub for Russian entities seeking to evade international sanctions through cryptocurrency. Prior to the Ukraine invasion in 2022, Kyrgyzstan's crypto industry was nearly non-existent. The increase in activity is largely attributed to Russian demand, as many Kyrgyz platforms, like Grinex, are linked to the now-defunct Russian exchange Garantex, which was accused of facilitating significant transactions. The report highlights that many of these platforms share the same addresses and contact information, suggesting they function as shell companies. In 2023, the value of bilateral trade between Kyrgyzstan and Russia reached $3.5 billion, emphasizing the financial ties. Additionally, the lack of regulatory oversight and corruption within Kyrgyzstan’s political system poses significant risks, potentially allowing sanctioned Russian groups to exploit the crypto ecosystem for access to global finance. Experts warn that without stronger anti-money laundering measures, the country remains vulnerable to illicit operations.

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