Kyrgyzstan steps up crypto market oversight over sanctions risks
The development of the crypto asset market in Kyrgyzstan must be accompanied by strict monitoring of sanctions risks, Minister of Economy and Commerce Bakyt Sydykov said at a meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies in Issyk-Kul region.
«Sanctions risks for our jurisdiction are no longer theoretical and require constant and strict oversight,» the minister said.
According to Sydykov, since 2022, the sanctions policies of the United States, the European Union and the United Kingdom toward Russia have increasingly affected companies and financial institutions in third countries.
More than 25 Kyrgyz companies and individuals are currently under sanctions, including three previously licensed virtual asset service providers.
Sydykov said an analytical platform called Crypto Compliance had been launched to monitor the sector. It allows authorities to screen clients, beneficial owners, transactions and crypto wallets for links to illicit activity.
The minister also announced that the licenses of two virtual asset service providers, Paybis Gold and InFin, had been revoked. In addition, the Cabinet of Ministers has decided to begin the liquidation of ElPay OJSC, the issuer of the KGST stablecoin.
Kyrgyz crypto companies have previously been targeted by Western sanctions. In August 2025, the United States imposed restrictions on Kyrgyz company Old Vector, which issued the ruble-backed A7A5 stablecoin. The U.S. Treasury said the company had participated in creating A7A5 together with Garantex and other entities. According to the U.S., the token was used to transfer Garantex customers’ funds after sanctions were imposed on the exchange.
That same month, the United Kingdom imposed sanctions on Grinex, Old Vector and TengriCoin. The British government linked the entities to the crypto infrastructure surrounding A7A5 and said it had been used to circumvent Western sanctions. According to the UK, about $9.3 billion was processed through a specialized crypto platform using A7A5 during its first four months of operation.
In October 2025, the European Union also imposed sanctions on the developer of A7A5, the Kyrgyz issuer of the token and the operator of the platform where it was actively traded. The EU also banned transactions involving A7A5 within its jurisdiction.
In April 2026, the EU additionally added to its sanctions list a Kyrgyz entity operating the platform that handled significant trading volumes of A7A5.
