The UK has imposed sanctions on Kyrgyzstan's financial sector and crypto networks allegedly used to help Russia evade Western sanctions, targeting a $930 million ruble-backed stablecoin project.
These new measures build on over 2,700 sanctions against Russia, following similar actions taken by the United States, the UK government stated in a statement on Wednesday.
Those sanctioned include Central Asia Capital Bank and its director Kantemir Charbaev, which the UK claims is used by Russia to fund military supplies. Two Kyrgyz crypto exchanges, Grinex and Meer, are also blacklisted, along with several entities related to the A7A5 stablecoin infrastructure.
According to the UK government, A7A5 processed $9.3 billion in transactions within four months, intending to simulate the ruble on the blockchain as a direct attempt to counter Western sanctions.
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The UK aims for more crypto participants
The sanctions list also includes Altair Holding based in Luxembourg, CJSC Tengricoin, Old Vector, A7A5 director Leonid Shumakov, and several individuals related to the network.
Sanctions Minister Stephen Doughty stated, "If the Kremlin thinks they can hide their attempts to soften the impact of sanctions through misleading crypto networks, they are very mistaken."
Grinex is widely regarded as the successor to the sanctioned Garantex platform, according to reports. The exchange allegedly credited balances for users of the sanctioned Garantex, which had $27 million in USDT frozen by Tether in March.
Last week, the U.S. Treasury Department's Office of Foreign Assets Control re-designated Garantex and sanctioned Grinex, accusing them of facilitating illegal transactions.
Related: EU sanctions crypto entities for election interference and misinformation
Kyrgyz President opposes UK sanctions allegations
On Thursday, Kyrgyz President Sadyr Zaparov opposed London's decision, warning against politicizing the economy. He denied that any bank in the country helped Russia evade sanctions, according to Reuters.
"To prevent any banks from being sanctioned, we decided that only the state-owned Kremet bank would conduct transactions in Russian rubles," said Zaparov. Kremet Bank was sanctioned by Washington earlier this year for acting as a trade payment hub for Russia.
Zaparov insists that Kyrgyzstan is ready to fulfill its international obligations. "I will not allow our citizens' interests and the country's trade economic development to be in vain," he said.
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