Kazakhstan has been taking a strong stance against illegal crypto exchanges in recent years, with a particular focus on platforms linked to money laundering activities. The country’s Financial Monitoring Agency (AFM) recently announced the liquidation of 36 unauthorized exchanges with a combined turnover exceeding $100 million. Additionally, access to over 3,500 unregistered crypto trading platforms has been restricted.
The crackdown on these exchanges comes as authorities are increasingly concerned about the potential misuse of unregulated platforms for criminal activities such as cyber fraud and drug trafficking. Many of these exchanges lacked essential anti-money laundering (AML) measures and know-your-customer (KYC) protocols, making them attractive tools for illicit transactions.
In collaboration with the National Security Committee and the Ministry of Culture and Information, Kazakhstan’s authorities seized $4.8 million in USDT and dismantled two crypto pyramid schemes. This operation also resulted in the recovery of an additional $545,000 USDT and the freezing of $120,000 USDT.
To further combat financial crimes, Kazakhstan has introduced legislative amendments that hold digital asset providers accountable for AML violations. These amendments include enhanced verification protocols for crypto transactions within financial institutions.
These measures reflect Kazakhstan’s increasing focus on regulating the crypto sector and preventing the exploitation of digital assets for illegal purposes. The AFM has also expressed its intention to work with international partners to expand efforts in addressing criminal activities associated with cryptocurrencies.
While Kazakhstan was once a significant player in the crypto industry, changes in regulations have led to a decline in the country’s role. Following China’s crackdown on crypto mining in 2021, Kazakhstan briefly became the world’s second-largest Bitcoin producer. However, strict regulations have since caused many miners to leave, resulting in the country contributing less than 5% of the global Bitcoin network hashrate.
Despite these changes, local interest in digital assets continues to grow. A recent report revealed that the number of Kazakhstani residents owning cryptocurrencies has doubled in the past year, indicating a sustained interest in the evolving digital economy.
Overall, Kazakhstan’s efforts to regulate the crypto sector and combat illegal activities demonstrate the country’s commitment to ensuring a safe and secure environment for digital asset transactions.