According to the head of the state-controlled investment agency, Kyrgyzstan’s cryptocurrency transactions reached $7 billion.
Officials released the figures at a meeting with the nation’s top US representatives, where cryptocurrencies were one of the main topics.
The news comes after a recent report showing that the former Soviet republic is being used by Russia and is being used to bypass war-related sanctions, including transactions through its crypto exchanges.
Kyrgyzstan announces total value of domestic crypto transactions
The digital economy, in particular the crypto market, has been the focus of recent consultations between director of Kyrgyzstan’s National Investment Agency (NIA), Farkat Iminoff, and Lessley Bealy’s US ambassador for Bishkek.
During the meeting, Iminoff reminded US diplomats that the Kyrgyz Republic regulated the cryptocurrency sector in 2022 and adopted “virtual assets” laws.
By the end of 2024, the country’s registered crypto-rising revenues had reached a value of $7 billion, stressing the head of the state agency.
Kyrgyzstan is considered a leader in Central Asia when it comes to blockchain technology, cryptocurrency mining, digital assets in general, and the development of artificial intelligence (AI).
In that context, the US ambassador has actively pointed out the introduction of digital SOM, a central bank digital currency (CBDC), issued by the National Bank of Kyrgyzstan.
Viguerie described its launch as one of the region’s most innovative steps. This is a sign of Kyrgyzstan’s desire for digital transformation.
According to the press release, both sides discussed current investment initiatives and future joint projects, with US representatives highlighting the importance of Washington’s help in simplifying procedures related to doing business within the country.
Kyrgyzstan officials have shown that his agency is ready to act as an intermediary between the corporation and the state agency and support the implementation of investment projects in Kyrgyzstan.
What is Kyrgyzstan’s role in avoiding sanctions in Russia?
Formal statements during the meeting, cited by the NIA press service, did not say whether Iminoff and Viguely discussed allegations that Russia was using Kyrgyzstan’s crypto platform to circumvent Western financial and trade restrictions.
In a recently published report on the issue, blockchain analytics firm TRM Labs said it “identifies growth patterns of Russian officials who are eschewing sanctions due to war in Ukraine and exploiting the country to source double-use goods.” I’ve explained in detail:
“The Kyrgyzstan registered exchanges have repeatedly promoted transactions related to authorized Russian entities. Many of these virtual asset service providers provide indicators of being shell companies.”
Some of these coin trading venues will behave similarly to that of Garantex, a licensed Russian exchange that was removed by US law enforcement in March. Another high-risk exchange believed to have succeeded Garantex, Grinex, has also been registered in Kyrgyzstan.
Just a few weeks after Garantex went offline, Grinex began processing its withdrawals with a Russian stub coin called the A7A5. According to an article in the Financial Times, the digital currency depicted by Ruble is used to transfer more than $9 billion in assets over four months.
The Stabble Coin was launched in Kyrgyzstan by Iran Sol, a Moldovan oligarch who is on the run. Its reserve assets were deposited in Promsvyazbank, one of the Russian banks placed under sanctions by both the US and the European Union.
“On-chain analysis suggests that Grinex and other Kyrgyzstan-based exchanges may have played a role in the transfer of funds after (Garantex’s) Takedown, highlighting the growing importance of Kyrgyzstan as a post-sandination conduit,” TRM Labs said.
