A recent report by TRM Labs reveals that Kyrgyzstan is being used as a hub for Russian entities aiming to evade international sanctions, particularly by facilitating cryptocurrency transactions. Russia-linked activities account for nearly the entirety of Kyrgyzstan's crypto sector, which saw rapid growth following the 2022 invasion of Ukraine, going from virtually nonexistent to significant in just a year. The report indicates that various Kyrgyz crypto platforms, such as Grinex and Meer, are linked to the Russian exchange Garantex, and facilitate large ruble-to-crypto exchanges. Experts note that there is little local demand for these services, and they are largely driven by Russian entities seeking access to global financial systems. Additionally, the political environment in Kyrgyzstan poses vulnerabilities that could be exploited for illicit flows, as reported by Transparency International. Kyrgyzstan's crypto industry is expected to continue expanding, with more than 126 Virtual Asset Service Providers (VASPs) now registered and efforts underway to develop a local stablecoin.

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