Kazakhstan blocks illegal crypto exchanges to combat money laundering

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 from the country’s financial watchdog AFM RK, the regulator liquidated 36 illegal crypto platforms with a total turnover of 60 billion tenge (about $112.84 million) in 2024 and blocked access to more than 3,500 unregistered crypto trading platforms . Cooperation with the National Security Committee and the Ministry of Culture and Information.

Highlighting the increase in money laundering activities, the regulator said these exchanges lack anti-money laundering measures and do not implement appropriate Know Your Customer protocols, making them a preferred channel for criminals such as fraudsters and drug traffickers.

The regulator also seized 4.8 million USDT from these platforms as part of the crackdown.

Among other efforts, the government was able to bust two crypto pyramid schemes and recover 545,000 USDT while freezing an additional 120,000 USDT linked to these fraudulent operations.

The statement stated that AFM RK will continue to collaborate with its international partners and develop tools that will strengthen transaction monitoring to combat crypto crimes and introduce new regulations that will hold digital asset providers accountable for non-compliance with AML laws.

The latest efforts are part of a broader crackdown on illicit crypto activity in Kazakhstan. As previously reported by crypto.news, AFM President Zhanat Elimanov said in a statement in October 2024 that the country would focus on reducing illegal crypto mining alongside its ongoing efforts to target unlicensed exchanges and illegal transactions involving crypto.

Kazakhstan has become a major cryptocurrency market, especially since China’s crackdown on crypto mining and crypto usage in 2021 led to an exodus of miners and crypto-related businesses to the region.

According to the December report by RISE Research and Freedom Horizons, while the developing crypto market saw an increase in tax revenues from the sector, the number of local people holding digital assets doubled in 2024.

However, the country maintained a strict regulatory environment and blocked access to foreign crypto platforms it deemed to violate digital asset laws. For example, United States-based Coinbase was blocked in December 2023 for offering uninsured cryptocurrencies.

However, this did not deter other players such as Binance and Bybit, which applied and received preliminary approval to offer trading and custody services within Kazakh borders.

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