Multiple Kyrgyzstan-registered cryptocurrency exchanges, many of which are shell companies, have been used by Russia to fund its war against Ukraine while evading global sanctions, according to The Record, a news site by cybersecurity firm Recorded Future.
Aside from having the same addresses, contact information, and founders, some of the Kyrgyz-registered virtual asset service providers had infrastructure resembling that of disrupted Russian cryptocurrency exchange Garantex, suggesting that the exchange's old operators may be also behind the new VSPs, a report from TRM Labs showed. Such exploitation of Kyrgyzstan-registered exchanges comes after the country's implementation of crypto-friendly measures three years ago, which have provided a legally protected designation for virtual assets. "Governments and law enforcement agencies seeking to counter Russia's sanctions evasion toolkit need to urgently engage directly with Kyrgyz authorities on compliance. If left unchecked, Russia could replicate these same playbooks in neighboring jurisdictions," said TRM Labs.
Aside from having the same addresses, contact information, and founders, some of the Kyrgyz-registered virtual asset service providers had infrastructure resembling that of disrupted Russian cryptocurrency exchange Garantex, suggesting that the exchange's old operators may be also behind the new VSPs, a report from TRM Labs showed. Such exploitation of Kyrgyzstan-registered exchanges comes after the country's implementation of crypto-friendly measures three years ago, which have provided a legally protected designation for virtual assets. "Governments and law enforcement agencies seeking to counter Russia's sanctions evasion toolkit need to urgently engage directly with Kyrgyz authorities on compliance. If left unchecked, Russia could replicate these same playbooks in neighboring jurisdictions," said TRM Labs.
