Kazakhstan authorities have blocked more than 3,500 illegal cryptocurrency exchanges in an effort to address money laundering concerns.
According to a recent press release of the AFM RK, the country’s financial watchdog, the regulator liquidated 36 illegal crypto platforms with a combined turnover of 60 billion tenge (about $112.84 million) in 2024 and, in cooperation with the National Security Committee, has restricted access to more than 3,500 unregistered crypto trading platforms blocked. and the Ministry of Culture and Information.
Citing an increase in money laundering activities, the regulator said these exchanges lacked anti-money laundering measures and did not enforce proper Know-your-customer protocols, making them a preferred channel for criminals such as scammers and drug traffickers.
As part of the crackdown, the regulator also seized 4.8 million USDT from these platforms.
Among other efforts, the government managed to dismantle two crypto pyramid schemes and recovered 545,000 USDT, while freezing another 120,000 USDT related to these fraudulent operations.
The AFM RK will continue to work with its international partners and improve tools to strengthen transaction monitoring to combat cryptocrime, the release said, adding that new regulations are being introduced to hold digital asset providers accountable for AML non-compliance -legislation.
The recent efforts are part of a broader crackdown on illegal crypto activities in Kazakhstan. As previously reported by crypto.news, AFM Chairman Zhanat Elimanov said in an October 2024 statement that the country will also focus on restricting unlawful crypto mining, in addition to its continued efforts to target unlicensed exchanges and unlawful transactions involving crypto.
Kazakhstan has become a major cryptocurrency market, especially since China’s crackdown on crypto mining and crypto use in 2021 led to an exodus of miners and crypto-related businesses to that region.
As of December report from RISE Research and Freedom Horizons, the fast-growing crypto market has seen a rise in tax revenue from the sector, while the number of locals owning digital assets has also doubled by 2024.
However, the country has maintained a strict regulatory environment and blocked access to foreign crypto platforms that it says have violated digital asset laws. For example, US-based Coinbase was blocked in December 2023 for offering uninsured cryptocurrencies.
Still, that hasn’t deterred other players like Binance and Bybit, which have both applied for and received preliminary approval to offer trading and custody services within Kazakh borders.
