TRM Labs Report: Some Russian Entities Are Using Kyrgyzstan’s Cryptocurrency Industry to Evade Sanctions

PANews July 27 news, according to Decrypt, a new report from British blockchain intelligence company TRM Labs pointed out that some Russian individuals and groups are using Kyrgyzstan's cryptocurrency ecosystem to evade international sanctions. Many platforms registered in Kyrgyzstan, including Grinex and Meer, have obvious links with Russian exchanges such as Garantex, and use Russian-backed stablecoins such as A7A5 to facilitate large-scale ruble-to-cryptocurrency transactions.

The report pointed out that many Kyrgyz platforms have the same registered addresses, contact information and founders, which is a typical behavior of shell companies. Russian-related activities occupy almost the entire Kyrgyzstan crypto industry, which was "almost non-existent" a month before the Russian-Ukrainian war.

In addition, the Kyrgyz government passed a law in January 2022 to support cryptocurrencies, effectively treating cryptocurrencies as property, while also establishing a registration system for virtual asset service providers (VASPs). Combined with growing demand from Russia, the passage of this law has enabled Kyrgyzstan’s crypto industry to develop rapidly, with VASPs reaching $59 million in transactions by the end of 2022 and $4.2 billion in the first seven months of 2024 alone.