Kazakhstan has taken a strong stance against illegal crypto exchanges in 2024, cracking down on platforms involved in money laundering activities. The country’s Financial Monitoring Agency (AFM) announced the liquidation of 36 unauthorized exchanges with a total turnover exceeding $100 million. Additionally, access to over 3,500 unregistered crypto trading platforms was restricted.
The intensified efforts by the AFM were driven by concerns over the misuse of unregulated exchanges for criminal activities like cyber fraud and drug trafficking. Many of these platforms lacked essential anti-money laundering (AML) measures and know-your-customer (KYC) protocols, making them attractive for illicit transactions. Working 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. This operation also led to the recovery of an additional $545,000 USDT and the freezing of $120,000 USDT.
In a bid to strengthen its fight against financial crimes, Kazakhstan introduced legislative amendments that hold digital asset providers accountable for AML violations. These changes include the implementation of enhanced verification protocols for crypto transactions within financial institutions. The country’s efforts reflect a growing focus on regulating the crypto sector and combating the exploitation of digital assets for illegal purposes. The AFM has also expressed intentions to collaborate with international partners to expand efforts in addressing criminal activities associated with cryptocurrencies.
While Kazakhstan was once a significant player in the crypto industry, recent regulations have led to a decline in mining activities. Following China’s crackdown on crypto mining in 2021, Kazakhstan briefly became the world’s second-largest Bitcoin producer. However, strict regulations have caused an exodus of miners, resulting in the country contributing less than 5% of the global Bitcoin network hashrate.
Despite these challenges, local interest in digital assets continues to grow. A recent report indicated that the number of Kazakhstani residents owning cryptocurrencies had doubled in the past year, highlighting a sustained interest in the evolving digital economy.
The actions taken by Kazakhstan demonstrate a commitment to combating financial crimes in the crypto sector while also acknowledging the importance of regulating digital assets to ensure a safe and secure environment for investors and users.