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The United Kingdom has expanded sanctions against Russia to include Kyrgyz financial systems and cryptocurrency networks that Moscow has been using to circumvent Western restrictions, according to a press release put out by the Foreign, Commonwealth & Development Office (FCDO) on Aug. 20. The new measures add to the 2,700 sanctions the UK has already imposed on Russia and follow similar actions taken by the United States.
“With sanctions continuing to bite, Russia has turned to the Kyrgyz financial sector to channel money through opaque financial networks, including through the use of cryptocurrencies. These networks have created a convoluted scheme to evade sanctions imposed by the UK and its partners,” read the press release.
The latest restrictions target Kyrgyzstan-based Capital Bank and its director, Kantemir Chalbayev, who stands accused of helping Russia make payments for military goods. Also sanctioned were cryptocurrency exchanges Grinex and Meer, along with entities tied to supporting the infrastructure of a new ruble-backed crypto token, A7A5, which processed $9.3 billion in transactions over the past four months.
“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,” said Sanctions Minister Stephen Doughty.
The sanctions list names eight entities: Grinex LLC, CJSC Tengricoin, Old Vector LLC, Capital Bank and Altair Holding SA, as well as individuals Leonid Shumakov, Kantemir Chalbayev and Zhanyshbek Nazarbek. The move comes as U.S.-led negotiations continue over a just peace in Ukraine.
The Financial Times previously reported that the A7A5 token, launched in Kyrgyzstan in February to facilitate cross-border payments outside Western sanctions, was created by fugitive Moldovan oligarch Ilan Shor in partnership with Russia’s PSB bank (formerly Promsvyazbank), which is linked to the defense sector.