A report from TRM Labs indicates that Kyrgyzstan is being utilized by Russian entities to circumvent international sanctions through its burgeoning cryptocurrency industry. The findings highlight that almost all crypto activity in Kyrgyzstan is linked to Russia, which had little to no cryptocurrency presence before the Ukraine invasion in 2022. Recent analyses suggest that Kyrgyz platforms, such as Grinex, which is suspected of being a rebranded version of the sanctioned Garantex, facilitate large-scale ruble-to-crypto transactions, primarily using Russian-backed stablecoins like A7A5. Although Kyrgyzstan's government enacted pro-crypto legislation in 2022, allowing for rapid growth with substantial trading volumes, there is little evidence of local crypto adoption, indicating that demand is largely driven by Russian actors. The report also raises concerns about the governance and political stability of Kyrgyzstan, which could further enable illicit financial activities.

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