Research from TRM Labs reveals that Kyrgyzstan is becoming a hub for Russian entities evading international sanctions through cryptocurrency. The report details that nearly all of Kyrgyzstan’s crypto activity is connected to Russia, which had minimal crypto presence prior to the 2022 invasion of Ukraine. Kyrgyz platforms like Grinex are suspected of facilitating transactions for Russian entities previously linked to the now-defunct exchange Garantex. The growth in Kyrgyz crypto activity is attributed to Russian demand, rather than local usage. Additionally, the Kyrgyz government has implemented pro-crypto laws increasing activity in the sector, with transaction volumes soaring to $4.2 billion in just seven months of 2024. Experts warn of the lack of local retail adoption and highlight political vulnerabilities that Russian actors may exploit. The report underscores connections between Kyrgyz exchanges and various entities, including paramilitary groups, further indicating a high risk of financial exploitation and illicit transactions.

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