A report from TRM Labs reveals that Kyrgyzstan is becoming a haven for Russian entities seeking to evade international sanctions through cryptocurrency. This activity, which makes up nearly all of Kyrgyzstan's crypto industry, surged after Russia's invasion of Ukraine in 2022. TRM Labs finds that many Kyrgyz platforms are closely linked to the halted Russian exchange Garantex, with signs of shell company behavior in their operations. The Kyrgyz crypto sector, facilitated by a pro-crypto law passed in January 2022, grew rapidly due to Russian demand. However, there's little evidence of significant local adoption, indicating that the market mostly serves Russian interests. The report highlights that sanctioned groups, including the Rusich Group, are using these platforms to conduct illicit transactions. The overall political environment in Kyrgyzstan, characterized by weak governance and lack of oversight, exacerbates the risk of exploitation by corrupt actors. Experts suggest there is a pressing need for stronger regulations to mitigate these vulnerabilities in the cryptocurrency sector.

Source 🔗