Take action over officials in Kyrgyzstan ‘helping Russia evade sanctions’, MPs and peers say

More than 20 MPs and peers have called on the foreign secretary to take action against institutions and individuals in Kyrgyzstan allegedly facilitating large-scale Russian sanctions evasion.

They urged the UK to levy personal sanctions against three top Kyrgyz officials for their alleged role in facilitating Russian sanctions evasion more broadly, and more specifically for allowing Kyrgyzstan to host infrastructure supporting the cryptocurrency A7A5.

A7A5 is a stablecoin that is pegged to the ruble and has now facilitated more than $100bn in transactions.

It is linked to the Russian bank Promsvyazbank, which has been placed under sanctions by the UK. The UK, EU and US have imposed sanctions on A7A5, and it is not possible to buy it in the UK, the US and most of Europe. However, exchanges in Kyrgyzstan – including with Grinex and Meer, now under sanctions – have allowed the purchase of A7A5 with cash.

Alexander Browder, a cryptocurrency expert and the author of a recent report on how Russia is using stablecoins – cryptocurrencies pegged to real assets, such as dollars, rubles or gold – to evade sanctions, said: “It’s time to tighten the noose on Russia’s sanctions evasion.

“Kyrgyzstan shouldn’t be allowed to enable Russia to evade the UK sanctions by harbouring Russian stablecoin operations, which ultimately lead to thousands of Ukrainian deaths.”

In a letter, the MPs and peers called on the UK to levy personal sanctions against the head of Kyrgyzstan’s central bank, Melis Turgunbaev; Kyrgyzstan’s general prosecutor, Maksat Asanaliev; and the head of the country’s financial regulations authority, Marat Pirnazarov.

Chris Coghlan, the Liberal Democrat MP for Dorking and Horley and a signatory of the letter, said: “The British government needs to shut down these loopholes now.

“This is one mechanism that Russia is using to finance its brutal war of aggression in Ukraine, and the UK government should take all measures it can to restrict the flow of funds to Putin.”

The former Conservative party leader Iain Duncan Smith said: “Targeted sanctions must be used to ensure that those who are enabling Russia’s illegal war machine are held accountable.”

A7A5 can be traded with other cryptocurrencies, eventually allowing its holders to access dollars and the broader financial system.

All this meant that A7A5 had continued to function and expand as “the main platform for sanctioned Russian individuals and entities to evade sanctions”, the letter said, moving more than $1bn a day. The company behind A7A5 appears to be trying to push the cryptocurrency network into Africa, reportedly recruiting staff from across the continent.

The A7A5 stablecoin had been “specifically designed for aiding sanctions evasion technology”, said Browder.

“What makes it a really good stablecoin for sanctions evasion is that it is completely controlled by Russian-backed entities and individuals. Any criminal who uses it has no fear that they will face prosecution or have their assets seized.”

Last year, the UK imposed sanctions on several entities in Kyrgyzstan, including Grinex and Meer, for providing infrastructure for A7A5. The letter implied that this was not sufficient, and that senior officials have to be sanctioned.

“One of the main reasons that A7A5 continues to operate is because of the cooperation from financial institutions and authorities in Kyrgyzstan, which registered A7A5 in the first place,” it said.

Turgunbaev, Asanaliev, Pirnazarov, A7A5 and the Foreign, Commonwealth and Development Office were approached for comment.