Britain Targets Kyrgyz Financial Institutions and Crypto Networks Aiding Kremlin

The United Kingdom has taken a significant step in its efforts to counter Russian sanctions evasion by imposing new restrictions on Kyrgyz financial institutions and crypto networks. The move is part of a broader global effort to tighten the noose around Moscow's war chest, as sanctioned exchange Garantex was accused of using "dodgy crypto networks" to evade restrictions and fund the Ukraine war.

According to reports, Britain has frozen U.K. assets belonging to Kyrgyz financial institutions and individuals involved in illicit activities. The sanctions minister, Stephen Doughty, warned that Moscow is using these crypto networks to fund its military operations, stressing that the measures are aimed at putting pressure on President Putin and disrupting the illicit financial channels supporting his war efforts.

The latest development comes after U.S. officials revealed that Garantex had shifted clients to a new exchange called Grinex in an attempt to evade restrictions. Investigators have linked this move to over $100 million in illicit funds, including ransomware groups such as Conti, Black Basta, Ryuk, LockBit, NetWalker, and Phoenix Cryptolocker.

U.S. officials also revealed that Garantex had compensated users with A7A5 tokens issued by Kyrgyz firm Old Vector to bypass sanctions. Old Vector, Garantex, its co-founders, and related shell companies were all sanctioned. The Britain authorities have also targeted the Kyrgyz company Old Vector, which has processed over $51.17 billion since its inception, according to Chainalysis.

Furthermore, the U.K. has expanded sanctions by targeting Altair Holding, which controls Kyrgyzstan's Keremet Bank. This move blocks access to London's financial and legal services for these individuals and institutions, further tightening the noose around Moscow's war fund.

The U.S. sanctions remain stronger due to dollar transfer control, but the U.K.'s move is a significant development in the global effort to disrupt Russian sanctions evasion. As the situation continues to unfold, it remains to be seen how these sanctions will impact the individuals and institutions involved.

Follow me on Twitter: @securityaffairs and Facebook and Mastodon (SecurityAffairs – hacking, Kyrgyz financial institutions) for the latest updates on this developing story.