TRM Labs: Russian Entities Are Using Kyrgyzstan Cryptocurrency Platforms to Evade Sanctions

According to a report by blockchain intelligence firm TRM Labs, Russian entities are using Kyrgyzstan-based cryptocurrency platforms to circumvent sanctions. Crypto transactions linked to Russia now account for nearly the entire cryptocurrency industry in Kyrgyzstan, a sector that was "virtually nonexistent" in the country prior to the Russia-Ukraine war in 2022. On-chain analysis indicates that the now-defunct Russian exchange Garantex has likely rebranded as Grinex, facilitating large-scale ruble-to-crypto transactions using Russian-backed stablecoins such as A7A5. The transaction volume of Kyrgyzstan’s virtual asset service providers reached $59 million by the end of 2022, but surged rapidly to $4.2 billion in the first seven months of 2024. These platforms have become crucial channels for Russian entities to counter sanctions and maintain access to the global financial system. (decrypt)