A report from TRM Labs reveals that Kyrgyzstan is increasingly being used by Russian entities to evade international sanctions through its burgeoning cryptocurrency industry. This sector, which was almost nonexistent before Russia's invasion of Ukraine in 2022, has rapidly grown, primarily driven by Russian demand rather than local usage. Analysis indicates that numerous Kyrgyz platforms are linked to the Russian exchange Garantex, which was shut down in March 2025. These platforms facilitate transactions using Russian-backed stablecoins like A7A5 and exhibit signs of being shell companies, sharing addresses and contact information. Notably, Russian groups, including those involved in paramilitary activities, are leveraging Kyrgyz exchanges to gain access to global financial systems amid sanctions. The rapid growth of Kyrgyzstan’s crypto industry has raised concerns about exploitation due to the country's weak governance and corruption issues, which create vulnerabilities for illicit financial flows. Without stronger regulatory safeguards, the cryptocurrency sector in Kyrgyzstan is likely to continue thriving as a conduit for Russian financial activities.

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