A report by TRM Labs reveals that Russian individuals and groups are leveraging Kyrgyzstan's cryptocurrency ecosystem to bypass international sanctions. Since the invasion of Ukraine in 2022, Kyrgyzstan’s crypto sector, which was previously minimal, has rapidly expanded, predominantly fueled by Russian demand. The research indicates that Kyrgyz-registered platforms, such as Grinex, are closely linked to the shuttered Russian exchange Garantex, which has allegedly rebranded itself. The report also highlights the use of stablecoins like A7A5 to facilitate large-scale transactions. Industry experts note that many Kyrgyz platforms share identical addresses and contact details, suggesting potential shell company operations, as the local crypto market exhibits little organic growth. Furthermore, Kyrgyzstan's weak governance and regulatory environment increase its susceptibility to illicit financial activities. As more than 126 virtual asset service providers are currently licensed in the country, the proliferation of the crypto industry remains unchecked, posing risks for exploitation by sanctioned Russian entities.

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