A report from TRM Labs reveals that Kyrgyzstan is being utilized by Russian entities to bypass international sanctions using its burgeoning cryptocurrency industry. TRM Labs found that nearly all of Kyrgyzstan's crypto activity is tied to Russian actors, with significant links to Garantex, a sanctioned Russian exchange that was shut down earlier in 2025. The growth of this industry, which was negligible prior to Russia's invasion of Ukraine, suggests it is largely driven by Russian demand rather than local adoption. Several Kyrgyz platforms are suspected of being shell companies with shared registration details. The report highlights that entities like the Rusich Group have also engaged in transactions using Kyrgyz exchanges to facilitate sanctioned activities. The political environment in Kyrgyzstan, marked by weak governance and corruption, further exacerbates the situation, making it vulnerable to illicit financial flows. Despite the potential for growth in cryptocurrency, the lack of stringent regulations could continue to allow this exploitation.

Source 🔗