Britain has announced sanctions against Kyrgyzstan-based Capital Bank and its director, Kantemir Chalbayev, as part of a growing crackdown on financial networks allegedly being used by Russia to get around international restrictions and fund the war in Ukraine. The bank has previously denied circumventing such restrictions.
“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,” the Foreign Office said on Wednesday.
So-called secondary sanctions also targeted the Grinex and Meer cryptocurrency exchanges, as well as the infrastructure behind the new rouble-backed cryptocurrency token A7A5, which has moved $9.3 billion on a dedicated crypto exchange in just four months, according to the British government.
The new round of British sanctions was also applied to the Kyrgyzstani firm Old Vector. The firm collaborated with Garantex, which had created Grinex to evade sanctions, and others in the development of the A7A5 token, according to an Aug. 14 statement by the U.S. Treasury Department that imposed similar measures.
In May, state-owned Capital Bank said it was complying with international sanctions regulations.
“Since 2023, as part of its risk management policy, Capital Bank has ceased all forms of financial interaction with individuals and legal entities subject to sanctions imposed by the United States, the European Union, and the United Kingdom,” the bank said. “This decision was made to protect the financial system of the Kyrgyz Republic from the potential impact of secondary sanctions and to ensure the security of operations for both resident and non-resident clients.”
The Foreign Office statement comes as U.S. President Trump tries to end the war in Ukraine through dialogue, meeting last week with Russian President Vladimir Putin and this week with Ukrainian President Volodymyr Zelenskyy and European leaders.
