A report by TRM Labs has revealed that Kyrgyzstan is increasingly becoming a hub for Russian entities seeking to evade international sanctions through cryptocurrency. Following the Ukraine invasion in 2022, the cryptocurrency sector in Kyrgyzstan saw significant growth, driven by Russian demand. Before the invasion, the industry was virtually nonexistent. Many platforms in Kyrgyzstan are suspected of being shell companies linked to the now-defunct Russian exchange Garantex, which facilitated large-scale transactions before its shutdown in March 2025. The report points out that nearly all of the crypto industry in Kyrgyzstan is associated with Russian activity, with minimal local use. It highlights that significant amounts flow through platforms like Grinex, which are suspected of onboarding users from Garantex. Moreover, the Kyrgyz government has implemented crypto-friendly regulations that may have inadvertently attracted illicit activities. Experts warn that Kyrgyzstan's weak governance and lack of regulatory oversight leave it susceptible to exploitation by both domestic and international illicit actors.

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