The UK has imposed sanctions on the financial sector and cryptocurrency networks in Kyrgyzstan, stating that these institutions are used by Russia to evade Western restrictions. The sanctions specifically target a stablecoin project allegedly valued at $9.3 billion, backed by the ruble.
The UK government announced on Wednesday that the new measures are an extension of the existing 2,700 sanctions against Russia. Additionally, this move follows similar actions taken by the United States last week.
The sanctioned entities include Capital Bank of Central Asia and its head, Kantemir Chalbayev. The UK claims that Russia uses this bank to finance military supplies. Two Kyrgyz cryptocurrency exchanges, Grinex and Meer, have also been added to the sanctions list, along with entities related to the A7A5 stablecoin infrastructure.
According to the UK government, A7A5 processed transactions worth $9.3 billion in just four months. The token aims to anchor the ruble on the blockchain and is seen as a direct effort to undermine Western sanctions.
The sanctions list also includes Luxembourg's Altair Holding, CJSC Tengricoin, Old Vector, A7A5 head Leonid Shumakov, and several individuals associated with the network.
UK sanctions minister Stephen Doughty stated, "If the Kremlin thinks it can cover up its desperate actions to alleviate sanctions pressure through illicit cryptocurrency networks, they are completely mistaken."
Reports indicate that Grinex has been considered the successor to the sanctioned Garantex platform. Allegedly, this exchange has been accounting for Garantex users. In March of this year, Garantex had $27 million USDT frozen by Tether.
Last week, the U.S. Treasury's Office of Foreign Assets Control (OFAC) re-listed Garantex on the sanctions list while imposing sanctions on Grinex, three executives, and six companies from Russia and Kyrgyzstan, accusing them of facilitating illegal transactions.
According to Reuters, Kyrgyz President Sadyr Japarov opposed London's decision on Thursday and warned against politicizing the economy. He denied that the country's 21 banks were involved in assisting Russia in evading sanctions.
Japarov stated, "To prevent any bank from being sanctioned, we decided that only the state-owned Keremet Bank can conduct business with the Russian ruble." Keremet Bank was sanctioned by Washington earlier this year for acting as a trade payment center for Russia.
Japarov emphasized that Kyrgyzstan will strictly fulfill its international obligations. "I will not allow the interests of our citizens and the development of the national trade economy to be undermined," he said.
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Original: “UK Sanctions Kyrgyz Bank and $9.3 Billion Crypto Fund Project Linked to Russia”
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