The United Kingdom has enacted sanctions against Kyrgyzstan’s financial sector and cryptocurrency networks allegedly used by Russia to circumvent Western restrictions, focusing on an estimated $9.3 billion, ruble-backed stablecoin operation.
These new sanctions expand upon more than 2,700 pre-existing UK sanctions against Russia and mirror a recent action taken by the United States, as noted in a Wednesday announcement by the UK government here.
Included in the sanctions are Capital Bank of Central Asia and its director, Kantemir Chalbayev, whom the UK claims facilitated military financing for Russia. Additionally, two Kyrgyz crypto exchanges, Grinex and Meer, were blacklisted, alongside entities associated with the infrastructure behind the A7A5 stablecoin.
The UK government reports that A7A5 processed transactions worth $9.3 billion in a mere four months. Created to mimic the ruble on blockchain, the token is characterized as a direct effort to undermine Western sanctions.
A7A5 releases reserve data on X. Source: A7A5
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UK targets more crypto players
The sanctioned entity list also features Luxembourg-based Altair Holding, CJSC Tengricoin, Old Vector, A7A5 director Leonid Shumakov, and several individuals connected to the network.
UK Sanctions Minister Stephen Doughty stated, “If the Kremlin believes they can obscure their desperate attempts to mitigate our sanctions by laundering transactions through questionable crypto networks — they are gravely mistaken.”
Reports indicate that Grinex was widely perceived as a successor to the sanctioned Garantex platform, allegedly crediting balances for Garantex users, which had been subjected to a $27 million USDT freeze by Tether in March.
Last week, the US Treasury’s Office of Foreign Assets Control (OFAC) reclassified Garantex. It also sanctioned Grinex, along with three executives and six firms based in Russia and Kyrgyzstan, accusing them of enabling illicit transactions.
Related: EU sanctions crypto entities for election interference, disinformation
Kyrgyz president rejects UK sanctions claims
Kyrgyz President Sadyr Japarov responded to London’s decision on Thursday, cautioning against the politicization of the economy, according to a Reuters report. He denied that any of the nation’s 21 banks were assisting Russia in evading sanctions.
“To ensure that none are affected by sanctions, we have resolved that only the state-owned Keremet Bank will conduct operations with the Russian ruble,” stated Japarov. Keremet Bank was sanctioned by the US earlier this year for serving as a center for Russian trade payments.
Japarov asserted that Kyrgyzstan is committed to adhering to international obligations, saying, “I will not permit the interests of our citizens and the trade and economic progress of the country to be undermined.”
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