Kazakhstan has strengthened efforts to stop the country from being a hub of illegal crypto exchanges.
The crackdown started in 2024, when the government financial regulator, the Financial Monitoring Agency of the Republic of Kazakhstan, declared its intention to eliminate all crypto platforms linked to money laundering.
Kazakhstan, once a popular country for Bitcoin mining, now contributes to less than 5% of BTC mining. This is because of stricter regulations that have caused miners to leave the country.
Genesis of Kazakhstan Anti-Money Laundering Crackdowns
According to Kazakhstan’s Financial Monitoring Agency (FMA), illegal crypto exchanges act as intermediaries for criminals to swap from crypto to fiat and vice versa. The crypto exchanges involved did not have proper anti-money laundering policies in place. Measures to ensure the accurate identification of users were not implemented. According to the financial regulator, the anonymity of these exchanges makes them a tool for malicious actors.
36 Illegal Crypto Exchanges Busted by Kazakhstan Authorities
In 2024, the Financial Monetary Authority, in collaboration with the National Security Committee and the Ministry of Culture and Information, took down 36 illegal crypto exchanges. The exchange’s total turnover of 60 million KZT was liquidated. All assets on the exchange totaling up to $4.8 million were also frozen and confiscated. The operation resulted in the termination of two crypto pyramid schemes using crypto to attract investments. The authorities recovered $545,000 from the bust and froze $120,000 while awaiting further procedures.
In a bid to combat money laundering, the FMA made amendments to the legislation introducing liabilities for digital asset providers that violated AML policies. The agency has also doubled down on running checks within organizations that process crypto transactions. The FMA vows to continue to partner with international organizations to strengthen its control over crypto transactions and combat its criminal use.
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