The United Kingdom has imposed sanctions on Kyrgyz banks, cryptocurrency exchanges and individuals it says were helping Russia bypass Western restrictions through a ruble-backed stablecoin operation worth $9.3 billion.
Measures Target Financial and Crypto Sectors
The new sanctions add to more than 2,700 restrictions already enforced by the UK against Russia. The announcement followed a similar move by the United States last week. The UK Treasury said the measures were designed to shut down financial loopholes used by Moscow to fund its military activities despite international restrictions.
Among those targeted were the Capital Bank of Central Asia and its director, Kantemir Chalbayev, who were accused of helping Russia finance military goods. Two Kyrgyz crypto exchanges, Grinex and Meer, were also sanctioned, alongside entities linked to the ruble-backed stablecoin known as A7A5.
$9.3 Billion Stablecoin Under Scrutiny
According to the UK government, the A7A5 token processed $9.3 billion worth of transactions in just four months. The stablecoin was designed to mirror the Russian ruble on blockchain networks and was described as a direct attempt to weaken Western sanctions.
The sanctions list also included Luxembourg-based Altair Holding, CJSC Tengricoin, Old Vector, and A7A5 director Leonid Shumakov, as well as several individuals allegedly involved in the network.
UK Sanctions Minister Stephen Doughty said Moscow would not be able to evade penalties by hiding transactions behind digital assets. “If the Kremlin thinks they can hide their desperate attempts to soften the blow of our sanctions by laundering transactions through dodgy crypto networks, they are sorely mistaken,” he stated.
Grinex Linked to Earlier Sanctioned Platform
Grinex, one of the newly sanctioned platforms, was reportedly seen as a successor to Garantex, a Russia-linked exchange sanctioned earlier this year. Garantex was hit with a $27 million freeze by stablecoin issuer Tether in March. Reports suggest Grinex credited balances to former Garantex users.
Last week, the US Treasury’s Office of Foreign Assets Control (OFAC) also blacklisted Grinex, three of its executives and six firms based in Russia and Kyrgyzstan, accusing them of facilitating illegal financial flows.
Kyrgyz President Rejects Allegations
Kyrgyz President Sadyr Japarov dismissed the UK’s claims, warning against politicising the economy. Speaking on Thursday, he denied that any of the country’s 21 commercial banks were involved in helping Russia skirt sanctions.
“To prevent any of them from falling under sanctions, we have decided that only the state-owned Keremet Bank will work with the Russian ruble,” he explained. Washington had already sanctioned Keremet Bank earlier this year for handling Russian trade payments.
Japarov insisted Kyrgyzstan remained committed to its international responsibilities. “I will not allow the interests of our citizens and the trade and economic development of the country to be reduced to nothing,” he said.
