In a new round of sanctions aimed at tightening the financial noose on Russia, the United Kingdom has targeted a network of financial institutions and crypto networks in Kyrgyzstan. These entities are accused of facilitating Russian sanctions evasion, funding the war in Ukraine, and supporting cybercrime, including ransomware activities. This move aligns with and builds upon earlier actions taken by the U.S., signaling a coordinated international effort to dismantle the illicit financial infrastructure supporting the Kremlin’s operations. Sanctions minister Stephen Doughty emphasized that Russia is using “dodgy crypto networks” to fund its war efforts and that these measures are designed to disrupt those illicit financial channels.
Among the specific targets of the U.K.’s sanctions is Kyrgyzstan’s Capital Bank and its director, Kantemir Chalbayev, which British authorities claim have been used by Russia to pay for military goods. The sanctions, which include freezing U.K. assets, aim to cut off access to London’s financial and legal services. The move against Capital Bank is a significant step in pressuring traditional financial institutions in third countries that are suspected of acting as intermediaries for Russia.
The U.K. sanctions also hit hard at crypto networks that have become a key part of Russia’s evasion strategy. The sanctioned Kyrgyz company Old Vector is a central piece of this network, accused of issuing the ruble-backed A7A5 token, which the U.K. government says was “specifically designed as an attempt to evade Western sanctions.” Old Vector has processed over $51 billion since its inception, according to Chainalysis, highlighting the massive scale of these illicit financial operations. The U.S. previously stated that the sanctioned exchange Garantex had shifted its clients to Grinex and used A7A5 tokens from Old Vector to bypass restrictions, linking these entities in a web of sanctions-evading activity.
The British authorities also expanded sanctions by targeting Altair Holding, a Luxembourg-based firm that controls Kyrgyzstan’s Keremet Bank, building on earlier U.S. actions. While U.S. sanctions remain more powerful due to their control over dollar transfers, the U.K.’s measures are crucial as they prevent sanctioned entities from accessing London’s influential financial and legal services. This dual-pronged approach by the U.S. and U.K. creates a more comprehensive blockade against Russia’s illicit financial networks.
The sanctions against Grinex, which is described as a successor to the previously sanctioned Garantex, underscore the cat-and-mouse game between Western authorities and those seeking to evade sanctions. Investigators have linked these platforms to more than $100 million in illicit funds, including money from prominent ransomware groups such as Conti, Black Basta, and LockBit. By targeting the exchanges and the tokens used to circumvent restrictions, the U.K. and its allies are demonstrating a commitment to dismantling the entire ecosystem of sanctions evasion, from traditional banks to the most opaque crypto networks.
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