Britain targets Kyrgyz crypto networks aiding Kremlin with sanctions

The United Kingdom on Wednesday imposed a new tranche of sanctions targeting financial institutions and cryptocurrency networks in Kyrgyzstan that are accused of facilitating Russian sanctions evasion.

The new British sanctions overlap with efforts from the United States and take aim at entities involved in funnelling money for the war in Ukraine as well as the Kremlin’s other malicious activities abroad, and which support the Russian ransomware ecosystem.

It follows U.S. officials renewing sanctions on several cryptocurrency exchanges earlier this month, including those providing the infrastructure for Kyrgyz-based crypto token A7A5 — a token described by the British government as “specifically designed as an attempt to evade Western sanctions.”

Britain’s sanctions target the Kyrgyz company Old Vector, which issues the A7A5 token and has “processed over $51.17 billion” since its inception, according to a report from Chainalysis.

Additional sanctions target “the Kyrgyzstan-based Capital Bank, and its director Kantemir Chalbayev, which Russia uses to pay for military goods,” said the U.K. Foreign Office. Any British-based assets of these entities are frozen under the sanctions.

Warning that the Kremlin was attempting to use “dodgy crypto networks” to fund the war in Ukraine, the British sanctions minister Stephen Doughty said the new measures would “keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest.”

According to research by the Organized Crime and Corruption Reporting Project (OCCRP), the sanctioned entities are also connected to George Rossi — an individual whom the National Crime Agency believes is a major player in a sprawling Russian money laundering system used by transnational drug traffickers, cybercriminals, Moscow elites evading sanctions and even the Kremlin’s espionage operations.

The British move also builds on earlier U.S. sanctions targeting Keremet Bank by sanctioning Altair Holding, a Luxembourg-based business that acquired a controlling stake in Keremet Bank last year.

While the U.S. sanctions remain the most powerful instrument due to international dollar transfers all clearing through New York, the British contribution will prevent the sanctioned entities from accessing London’s financial and legal services.

“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,” Doughty said. “Alongside our allies, we will continue to support the US-led drive to end this illegal war and secure a just and lasting peace.”