A report from TRM Labs highlights that Kyrgyzstan’s cryptocurrency industry has rapidly expanded, primarily driven by Russian demand following the invasion of Ukraine. The analysis shows that almost all crypto activities in Kyrgyzstan are linked to Russian entities, particularly through platforms associated with the previously sanctioned Garantex exchange. Kyrgyzstan's political environment, characterized by weak governance and a pro-crypto legislative framework, has created vulnerabilities that Russian actors exploit to circumvent international sanctions, facilitating substantial financial flows through these crypto platforms. While the sector grew, with transaction volumes skyrocketing, most of this activity is not due to local demand. Experts warn that without stricter regulations and oversight, Kyrgyzstan's crypto landscape could further enable illicit financial activities, underscoring the need for improved integrity and transparency within the country's governance.

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