Kyrgyzstan’s Crypto Sector May Be Largely Driven by Russia-Linked Activity, TRM Labs Suggests

Key Points

1. Russia-linked entities dominate Kyrgyzstan's cryptocurrency industry, using it to bypass sanctions, with transactions routed through Kyrgyz-registered platforms like Envoys Vision Digital Exchange (EVDE).

2. Kyrgyzstan's crypto transaction volume surged from $59 million in 2022 to over $4.2 billion in the first seven months of 2024, driven by Russian demand and pro-crypto laws.

3. Bilateral trade between Kyrgyzstan and Russia reached $3.5 billion in 2024, with imports into Russia via Kyrgyzstan and similar nations hitting $20 billion in the first half of 2023.

4. Chinese exports of dual-use goods to Kyrgyzstan and Kazakhstan rose by 64% between 2022 and 2023, totaling $1.3 billion, highlighting Kyrgyzstan's role in sanctions evasion.

5. Kyrgyzstan's weak governance, low judicial independence, and corruption (scoring 25/100 on the 2024 Corruption Perceptions Index) enable Russian entities to exploit its crypto platforms with minimal oversight.