Kazakhstan’s financial regulators have cracked down on illegal cryptocurrency activity, shutting down 130 unlicensed exchanges and seizing around $16.7 million in digital assets.
As part of a wider crackdown on money laundering and illicit financial activity, Kazakhstan has also tightened its crypto rules. Only licensed exchanges approved by the Astana Financial Services Authority and linked to local banks are allowed to operate legally. Platforms operating without authorization will face strict penalties.
In a report from The Times of Central Asia, Deputy Chairman of the Financial Monitoring Agency (AFM), Kairat Bizhanov, said that the seized exchanges were involved in processing criminal funds. In addition, authorities uncovered 81 underground networks that helped people convert crypto into cash, handling more than 24 billion KZT (over $43 million).
Cash withdrawals remain a major concern. In 2024, over 13.2 trillion KZT ($24.1 billion) was withdrawn through ATMs. This number is one trillion higher than the 2023 number. A lot of those transactions involved bank cards registered under fictitious names so that untraceable transfers between anonymous parties were made.
In the last three years, Kazakhstan’s tax authorities have cracked down on fake companies, canceling the registration of 3,600 shell firms linked to approximately 30,000 false transactions, worth more than $500 million in total.
Kazakhstan’s regulation
To address these risks, Kazakhstan has introduced new regulations. Card top-ups beyond 500,000 KZT ($913) will need an identity verification number (IIN), and banks will be required to retain ATM camera videos for a minimum period of six months. The authorities also intend to increase biometric checks, such as face and fingerprint recognition, on all cash withdrawals.
Kazakhstan is also set to reinforce its position in cryptocurrency and blockchain. A state crypto reserve is to be set up by the National Bank via a subsidiary dedicated to alternative investments. It will utilize seized or state-mined digital currencies and will be supported by upcoming legislative reforms.
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