A report from TRM Labs indicates that Kyrgyzstan is being exploited by Russians to bypass international sanctions. The research highlights that almost all of Kyrgyzstan's cryptocurrency activity is tied to Russian operations, particularly platforms related to the now-defunct exchange Garantex. This surge in the crypto industry, which was nearly nonexistent before the Ukraine invasion in 2022, is primarily driven by Russian demand, rather than local usage. Various Kyrgyz exchanges are found to have affiliations with Garantex and facilitate significant ruble-to-crypto conversions. The report identifies ties of such platforms to illicit actors, including paramilitary groups, and emphasizes the need for better regulatory oversight in Kyrgyzstan to prevent exploitation. A pro-crypto law that Kyrgyzstan adopted in early 2022 has helped expand its crypto sector, which saw transaction volumes skyrocket, further entrenching the country in Russia's financial strategies amid sanctions.

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