Kyrgyzstan Is Moscow’s Crypto Backdoor to Dodge Sanctions, TRM Labs Warns

Kyrgyzstan’s rapid crypto expansion has become a sanctions workaround for Moscow, with analysts at blockchain forensic firm TRM Labs claiming that Russian actors are actively using Bishkek-registered shell crypto exchanges to “procure dual-use goods since the outset of the war in Ukraine.”

In a recent blog post, analysts noted that many crypto providers registered in Kyrgyzstan exhibit classic shell company traits, including identical apartment addresses, recycled founders, and even copy-pasted emails.

Moreover, several of these Kyrgyz exchanges exhibit “similar on-chain heuristics to Garantex,” the blacklisted Russian crypto exchange sanctioned by the U.S. Treasury for facilitating sanctions evasion and darknet market activity before its takedown by law enforcement in March 2025.

Illicit Crypto Flows

According to data from the New York-headquartered blockchain forensics firm, more than 90% of illicit crypto inflows to Kyrgyz-registered exchanges from February 2022 to July 2025 were tied to sanctions-related activity.

Shared Control

TRM Labs notes that shortly after Garantex was shut down, a spinoff called Grinex emerged and began using “the same spending heuristic previously associated with Garantex.”

“In May 2025, TRM Labs reported that Grinex facilitated the movement of funds from Garantex by enabling withdrawals via Russian stablecoin A7A5. Users with balances exceeding USD 50,000 were able to extract funds through Grinex using A7A5 shortly after Garantex’s takedown by law enforcement,” the firm said.

Additionally, TRM Labs analysts say wallet infrastructure across Kyrgyz exchanges suggests “shared control or coordination.” Some, like Envoys Vision Digital Exchange, even have exposure to groups such as Rusich, a Russian paramilitary unit sanctioned in 2022 for having “participated in combat alongside Russia’s military in Ukraine.”

TRM Labs links Kyrgyzstan’s crypto surge to a 2022 law that granted tokens property rights, clearing the way for 126 registered platforms by late 2024. The warning signs are clear, they say, as crypto-clueless founders and platforms that skip KYC point to “classic hallmarks of a coordinated network designed to obfuscate illicit flows.”

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