Has Russia transformed Kyrgyzstan’s booming crypto market into a backdoor for mobile funds? The new report sheds light on how the Kyrgyzstan-registered exchanges are helping Russian networks avoid sanctions.
summary
- TRM Labs says the Kyrgyzstan-based crypto exchange is helping Russian networks reuse their funds.
- Kyrgyzstan’s crypto industry thrives on billions of transactions, but weak surveillance makes it vulnerable to misuse.
- The stubcoin A7A5 and Shell sub-extension, supported by the Russian ruble tied to the approved group, are at the heart of this growing sanctions avoidance network.
According to TRM Labs, Kyrgyzstan’s crypto industry has exploded from near zero to billions of activity since passing the “virtual assets” law by October 2022.
However, due to relatively weak regional surveillance, rapid growth has provided an attractive foundation for entities seeking to bypass sanctions.
Kyrgyz Crypto will be replaced under scrutiny
The TRM Labs report points to the Crypto Exchanges Grinex and Meer that took place in Kyrgyzstan shortly after USLAW enforcement disrupted Russian Garantex in March 2025.
Chain analysis helps both suspected successors use wallet infrastructure and transaction patterns similar to Garantex, helping Russian users move funds through the long-scrutinized A7A5.
Breakdown of illegal crypto volumes that flow through registered exchanges by TRM Lab
Crypto.News reported early June that an FT investigation revealed that A7A5 Stablecoin has quietly moved billions since its launch and has ties to authorized entities suggesting it is part of a broader effort to allow cross-border payments to Russian entities.
read more: Russian ruble assist stablecoin a7a5 moves $9.3 billion in four months: Report
Another Exchange, the Envoys Vision Digital Exchange (EVDE), has been found to have links to wallets linked to the Rusich Group, a licensed Russian paramilitary organization. Many of these platforms also show signs of being a shell company, such as identical registered addresses, share founders, and recycled contact information, suggesting illegal control of coordination or sharing.
Why Kyrgyzstan must tighten controls
TRM Labs warns that while Kyrgyzstan could be misused rather than accomplice, weak surveillance keeps the doors wide open.
Without stricter control over VASP registrations, clearer ownership rules and strong checks of shell companies, the Russian financial network will continue to leverage the country’s crypto infrastructure.
If not addressed, similar tactics could also spread to neighboring Kazakhstan and Uzbekistan. Kazakhstan and Uzbekistan are already implementing encryption-friendly regulations, undermining international sanctions.
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