Russian Entities Using Kyrgyzstan’s Crypto Industry to Evade Sanctions: Report
Main Idea
Russia is using Kyrgyzstan's crypto sector to evade international sanctions, with Kyrgyz-registered platforms facilitating transactions for Russian entities, including paramilitary groups, according to TRM Labs.
Key Points
1. TRM Labs reports that Kyrgyzstan's crypto sector is being exploited by Russia to bypass sanctions, with significant transaction volumes linked to Russian entities.
2. Kyrgyzstan passed a pro-crypto law in 2022, enabling rapid growth of its crypto sector, with VASPs handling $59 billion in transactions by 2024.
3. Kyrgyz-registered platforms like Grinex and Meer have clear ties to Russian exchanges and facilitate transactions for sanctioned groups, including the Rusich Group.
4. Bilateral trade between Kyrgyzstan and Russia surged, with Chinese exports of dual-use goods to Kyrgyzstan and Kazakhstan increasing by 64% from 2022 to 2023.
5. Kyrgyzstan's weak governance and corruption (scoring 25/100 on Transparency International's 2024 index) make it vulnerable to exploitation by illicit financial flows.
Description
TRM Labs found that Russia-linked activity accounts for almost all of Kyrgyzstan’s cryptocurrency industry.
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