On August 20, the United Kingdom announced new sanctions targeting the Kyrgyz financial system and crypto networks London says have been used by Russia to avoid sanctions stemming from the war in Ukraine. The U.K.’s sanctions come on the heels of new U.S. sanctions against some of the same actors.
This is the latest move in an ongoing battle that often resembles a game of sanctions whack-a-mole. When one avenue is shut off – for money laundering, or dealing with sanctioned entities and industries – another pops up.
In an interview with state media outlet Kabar, Kyrgyz President Sadyr Japarov accused Western nations of politicizing the economy with sanctions, claiming that there was no evidence that Kyrgyz financial institutions were involved in sanctions evasion.
According to an August 20 press release from the U.K’s foreign ministry, “With sanctions continuing to bite, Russia has turned to the Kyrgyz financial sector to channel money through opaque financial networks, including through the use of cryptocurrencies.”
The new U.K. sanctions take aim at the Kyrgyzstan-based Capital Bank and its director, Kantemir Chalbayev, claiming that Russia uses the bank “to pay for military goods.” Other new sanctions targets included CJSC Tengricoin, the operator of the Meer cryptocurrency exchange; Old Vector LLC, which reportedly launched the A7A5 cryptocurrency for cross-border payments; Altair Holding, a Luxembourg-registered company previously owned by George Rossi (a Ukrainian national sanctioned in 2024); Leonid Shumakov, believed to be the director of A7A5; and Zhanyshbek Uulu Nazarbek, reported by local media in December 2024 to be the head of Kyrgyzstan’s state trading company.
The new U.K. sanctions also target Grinex. Earlier in August, the U.S. Treasury Department announced sanctions against Grinex and a number of associated companies in Russia and Kyrgyzstan, referring to Grinex as the successor of Garantex.
In late June, the Financial Times exposed a crypto laundering scheme involving a Russian ruble-backed token, A7A5, traded primarily through Grinex, a cryptocurrency exchange widely believed to be the successor of Garantex, a previous Russian platform sanctioned in April by the U.S. and March by the EU. In March, the U.S. announced “a coordinated action with Germany and Finland to disrupt and take down the online infrastructure used to operate Garantex.”
In comments to the Financial Times, Grinex said it was unrelated to Garantex.
In July, Brett Erickson, managing principal at Obsidian Risk Advisors, wrote in an analysis for The Diplomat that:
The scale and velocity of A7A5’s flows, paired with Grinex’s structural similarity to Garantex, suggest that this was not opportunistic activity, but a continuation of an already-rehearsed sanctions bypass framework. What mattered more than the sum, however, was the architecture behind it. Informal agent networks, multi-hop transfers, and front companies disguised as digital finance entities were used to quietly move rubles out of the Russian economy and into offshore wallets, using Kyrgyzstan’s regulatory ambiguity as a shield.
To Western analysts, A7A5 may read as an isolated event. It isn’t. It is the latest node in a sanctions evasion playbook that has been in live development since 2014, and in full operational swing since the first wave of post-invasion sanctions from the Russo-Ukrainian War in 2022.
The Financial Times report claimed that A7A5 had moved around $9.3 billion through Grinex in four months. The U.K. sanctions announcement cited the same figure.
Last week, Chainanalysis said that “[t]hrough the end of July 2025, A7A5 has processed over $51.17 billion in volume.”
In the face of the additional sanctions targeting Kyrgyz banks and nationals, Japarov was firm in his denials. To Kabar, he said that although the U.S. had imposed sanctions against a different Kyrgyz bank, Keremet Bank, in January, “at the same time, they were unable to present a single fact of violation. And they will not be able to, because there are no such facts and there never were.” The U.K. sanctioned Keremet in February.
Japarov said he had suggested an independent audit to the U.S. ambassador, but the idea was refused. Later in the interview, he suggested going directly to President Donald Trump and Prime Minister Keir Starmer with his complaints. “Maybe they are not getting the message. There is no need to politicize the economy.”
“But we already know very well where this data comes from,” Japarov continued. “It comes from local NGOs and our internal ill-wishers who send anonymous false information there.” Japarov offered no evidence to support his claim. He went on to suggest that Kyrgyzstan was being targeted because its economy was doing so well.
