Authorities in Kazakhstan are cracking down on a massive cryptocurrency Ponzi scheme that has defrauded investors of millions of dollars in the region.
The financial pyramid scheme, operated by Amir Capital, has been operating for several years in Central Asia and parts of Eastern Europe, enticing victims with promises of high returns on investments in various crypto projects.
Kazakhstan Takes Action Against Crypto Pyramid Scheme
Amir Capital, masquerading as an international investment fund, is currently under investigation in Kazakhstan for its involvement in a crypto Ponzi scheme. The scheme targeted citizens of Kazakhstan, Kyrgyzstan, Belarus, and Russia, offering them significant returns on investments in cryptocurrency trading, mining, and various projects.
Investors were required to register on the platform’s website and create personal accounts, depositing funds in cryptocurrencies such as Bitcoin, Ethereum, and Tether.
Authorities Pursue Seizure of $10 Million in Digital Assets
Upon investigation, it was discovered that funds were redistributed among participants in a pyramid structure, with newer investors’ money used to pay returns to earlier members. In late 2021, withdrawals were restricted under the pretext of technical issues that were never resolved.
A court order has been issued for the seizure of over $10 million in crypto assets and a land plot in the Almaty region. The ongoing investigation, led by the local department of the Anti-Monopoly Service in Almaty, has identified over 40 individuals involved in the criminal scheme.
One of the alleged organizers has been arrested and detained for two months, while efforts continue to dismantle the Ponzi scheme.
Challenges in Kazakhstan’s Crypto Landscape
The recent crackdown on the cryptocurrency pyramid scheme highlights the challenges faced by Kazakhstan as it emerges as a prominent player in the crypto space. The country experienced a surge in Bitcoin mining following China’s ban on crypto activities in 2021, leading to energy shortages due to the influx of miners attracted by low electricity rates.
To address the energy crisis, authorities implemented restrictions and pricing measures while legalizing and regulating the crypto market. The government aims to expand the licensing regime for exchanges and facilitate trading on authorized platforms.
In a bid to tap into the industry’s potential, Kazakhstan has approved projects such as crypto payment cards and Bitcoin ETF listings. However, the country also faces threats from criminal organizations exploiting its growing crypto market, as seen in cases of illegal cryptocurrency mining operations.