A report from TRM Labs reveals that Kyrgyzstan is becoming a hub for Russian entities seeking to bypass international sanctions through cryptocurrency. The analysis shows that the country's crypto sector, virtually nonexistent prior to 2022, now mainly caters to Russian demands. Kyrgyzstan's government passed a pro-crypto law in January 2022, recognizing cryptocurrencies as property, which resulted in a significant increase in crypto transactions despite limited local adoption. The report identifies connections between Kyrgyz platforms like Grinex and Russian exchanges such as Garantex, facilitating large transactions using Russian-backed stablecoins. The absence of stringent regulations and governance issues further enable illicit financial flows, according to experts. With over 126 licensed virtual asset service providers in the country, the growth of Kyrgyzstan’s crypto industry appears directly linked to Russian activities, highlighting the potential for exploitation by sanctioned entities and corrupt actors.

Source 🔗