The United Kingdom has broadened its sanctions on Russia by focusingon Kyrgyz banks, cryptocurrency exchanges, and individuals allegedtobeinvolvedin a $9.3 billion ruble-backed stablecoin network. The action,revealed on Wednesday, highlightsincreasing Western examination of digital assets purportedlyutilized to evade financial sanctionsplaced on Moscow.
The UK government states that the actionsexpand on over 2,700 current sanctions imposed on Russia and alignwith a comparable initiative announced by the United States the previous week. The Capital Bank of Central Asia and its director, Kantemir Chalbayev, are among those sanctioned for allegedly aiding Russia in financing military-related items. Two Kyrgyz crypto exchanges, Grinex and Meer, were blacklisted alongside organizations linked to the infrastructure supporting the A7A5 stablecoin.
Authorities reported that A7A5 managed $9.3 billion in transactions within only four months, functioning as an on-chain variant of the ruble intended to weaken Western sanctions. UK Sanctions Minister Stephen Doughty criticized the initiative, saying: “If the Kremlin believes they can conceal their desperate efforts to mitigate the impact of our sanctions by laundering transactions through questionable crypto networks they are gravely mistaken.”
Global sanctions pressure and Kyrgyz response
The roster of sanctioned players also featured Altair Holding basedinLuxembourg, CJSC Tengricoin, Old Vector, A7A5 director Leonid Shumakov, alongwithvarious other individuals associatedwith the network. Grinex, specifically, has attractedincreased attention as it isviewed as a successor to the Garantex platform, which has alreadybeensanctioned. Reports suggested that Grinex supposedlyassigned balances to Garantex users after Tether suspended $27 million in USDT associatedwith the exchange earlier this year. Last week, the US Treasury’s Office of Foreign Assets Control (OFAC) broadened its actions against Garantex while imposingsanctionson Grinex, three executives, and six associatedcompanies in Russia and Kyrgyzstan.
Kyrgyz President Sadyr Japarov dismissed the accusations,cautioning against the politicizationof the nation’s financial system. He rejected the claims that any of Kyrgyzstan’s 21 banks were helping Russia avoid sanctions and affirmed that the government had takensteps to reduce risks. “Japarov stated that inorder to avoid sanctions, we have determined that only the state-owned Keremet Bank will handle the Russian ruble.” Keremet Bank was previously sanctioned by Washington earlier this year for acting as a center for Russian trade transactions.
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Japarov reaffirmed that Kyrgyzstan would fulfill its international commitments, but stressed the importance of safeguarding the nation’s economic growth. “I will not permit the interests of our citizens and the nation’s trade and economic growth to be diminished to nothing,” he stated.