Russia Uses Kyrgyz Crypto Hub to Evade Sanctions and Fund Ukraine War: TRM Labs

Key Points

1. Kyrgyzstan's 'On Virtual Assets' law in 2022 led to a surge in crypto activity, with transaction volumes rising from $59 million in 2022 to $4.2 billion in the first seven months of 2024.

2. TRM Labs reports that Kyrgyz-registered exchanges are being used as shell entities by groups like the Rusich paramilitary organization to evade sanctions and fund Russia's war in Ukraine.

3. Russian investment in Kyrgyzstan increased by 23% in early 2024, and trade between the two nations reached $3.5 billion, with Kyrgyzstan becoming a key transshipment point for dual-use goods.

4. Chinese exports of dual-use items to Kyrgyzstan and Kazakhstan rose by 64% from 2022 to 2023, totaling $1.3 billion.

5. Russia is exploring the use of crypto for grain export payments, with the Russian Agricultural Bank and the Bank of Russia evaluating digital asset-based payment solutions.