Crackdown on Illegal Crypto Exchanges in Kazakhstan
In 2024, Kazakhstan intensified its efforts to crack down on illegal crypto exchanges, specifically targeting platforms that were linked to money laundering activities. The country’s Financial Monitoring Agency (AFM) announced that they had taken action against 36 unauthorized exchanges with a combined turnover of over $100 million and had restricted access to more than 3,500 unregistered crypto trading platforms.
Money Laundering Concerns
The crackdown on illegal exchanges was driven by concerns over the misuse of unregulated platforms for criminal activities such as cyber fraud and drug trafficking. Many of these exchanges did not have proper anti-money laundering (AML) measures or know-your-customer (KYC) protocols in place, making them attractive for illicit transactions.
In collaboration with the National Security Committee and the Ministry of Culture and Information, authorities seized $4.8 million in USDT and dismantled two crypto pyramid schemes. Additionally, they were able to recover $545,000 USDT and froze $120,000 USDT.
To further combat financial crimes, Kazakhstan introduced legislative amendments that hold digital asset providers accountable for AML violations. These changes include implementing enhanced verification protocols for crypto transactions within financial institutions.
The country’s actions demonstrate a growing focus on regulating the crypto sector and preventing the exploitation of digital assets for illegal activities. The AFM also has plans to work with international partners to expand efforts in addressing criminal activities related to cryptocurrencies.
Kazakhstan’s Changing Crypto Landscape
Once a significant player in the crypto industry, Kazakhstan saw a decline in mining activity after China’s crackdown on crypto mining in 2021. This led to a decrease in the country’s contribution to the global Bitcoin network hashrate, dropping to less than 5%.
Despite these changes, local interest in digital assets has been on the rise. A recent report revealed that the number of Kazakhstani residents owning cryptocurrencies had doubled in the past year, indicating a continued interest in the evolving digital economy.
