A report from blockchain intelligence firm TRM Labs indicates that Kyrgyzstan is now a hub for cryptocurrency activities linked to Russian entities seeking to evade international sanctions. Nearly all of Kyrgyzstan's crypto industry is tied to Russian activities, which surged following the invasion of Ukraine in February 2022. TRM Labs' analysis reveals that many Kyrgyz exchanges exhibit significant connections to shut-down platforms like Garantex, primarily catering to Russian demand rather than local users. The Kyrgyz government, in an attempt to promote crypto, has seen transaction volumes rise dramatically, primarily due to these Russian dealings. The report also identifies specific groups, including the Rusich Group, utilizing Kyrgyz exchanges for illicit financial transactions. Experts highlight the political vulnerabilities in Kyrgyzstan that facilitate these operations, exacerbated by a lack of regulatory checks that may enable corrupt practices. The rapid expansion and potential lack of oversight in Kyrgyzstan's crypto sector raise concerns about its role in international sanction evasion.

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