A report by TRM Labs reveals that Kyrgyzstan is being utilized by Russian individuals and groups to evade international sanctions through its cryptocurrency industry, which was nearly nonexistent prior to the Russian invasion of Ukraine in 2022. The report indicates that nearly all of Kyrgyzstan's crypto activity is linked to Russian entities, driven by demand rather than local adoption. TRM Labs has identified suspicious activity among Kyrgyz platforms, as many are linked to the shuttered Russian exchange Garantex. The pro-crypto laws passed in Kyrgyzstan have led to rapid growth in the sector, largely fueled by Russian transactions. The report exposes that platforms facilitate large-scale ruble-to-crypto exchanges using Russian-backed stablecoins. Furthermore, the governance issues in Kyrgyzstan, including weak checks and balances, create vulnerabilities that can be exploited for illicit financial flows, making it difficult for the country to combat such practices effectively.

Source 🔗