A report from TRM Labs indicates that Kyrgyzstan is becoming a hub for Russian entities evading international sanctions through cryptocurrency. The research shows that the Kyrgyz crypto sector, previously almost non-existent, is now predominantly driven by Russian demand, especially after the invasion of Ukraine in 2022. Many local platforms have links to the shuttered Russian exchange Garantex, handling significant ruble-to-crypto transactions with stablecoins like A7A5. Notably, numerous exchanges share the same registration details, suggesting they may function as shell companies. Despite a growing transaction volume reaching billions, experts highlight a lack of local adoption, pointing to Kyrgyzstan’s weak governance as a facilitator for illicit activities. Furthermore, transactions from these exchanges are connected to sanctioned Russian groups and have implications for regional security, with Kyrgyzstan positioned as a crucial player in the Russian supply chain for dual-use goods, underscoring ongoing geopolitical tensions.

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