Kazakhstan is intensifying its efforts to address illegal activities within the cryptocurrency sector, resulting in the closure of numerous platforms this year. The Financial Monitoring Agency (AFM) has reported that it has shut down 130 crypto platforms that were implicated in money laundering cases. This initiative reflects a commitment to curtailing illicit financial activities, with approximately $16.7 million in cryptocurrencies linked to these operations seized by authorities.
In conjunction with the crackdown on unauthorized crypto services, the AFM has implemented stringent regulations regarding large financial transactions. The agency recently announced that any bank card top-ups exceeding 500,000 tenge (approximately $925) will necessitate verification of the sender’s Individual Identification Number (IIN). Previously, only the recipient’s details were verified, but this new rule aims to enhance the scrutiny of substantial transactions. Additionally, officials are considering the possibility of using mobile applications or SMS for further verification processes.
The platforms being targeted are not the traditional centralized cryptocurrency exchanges that most users are familiar with; rather, they resemble conventional currency exchange offices, often termed as crypto exchangers. Earlier this year, 36 similar entities were also shut down, indicating an ongoing effort to regulate the market more aggressively and prevent illicit activities.
Despite these heavy-handed measures against unregulated operations, the government maintains its support for legitimate uses of digital assets. Kazakhstan is keen on positioning itself as a leading cryptocurrency hub in Central Asia. The country has introduced initiatives like the acceptance of regulatory fees in stablecoins, such as Tether (USDT), and has launched one of the region’s first Bitcoin spot funds.
In another significant step towards establishing a secure cryptocurrency ecosystem, Kazakhstan has initiated plans to create a state-backed cryptocurrency reserve known as the Alem Crypto Fund. This fund, developed under the Astana International Financial Centre and overseen by the Qazaqstan Venture Group, aims to build a sustainable portfolio of digital assets over the long term. The fund has already made initial investments in Binance Coin (BNB), a move that reflects the country’s broader strategy to weave digital currencies into its financial system, thereby bolstering its status as a regional financial center.
Kazakhstan’s multifaceted approach includes tightening the regulatory framework while simultaneously facilitating the growth of legitimate cryptocurrency activities. Such efforts illustrate the delicate balance the government needs to maintain between fostering innovation in the digital finance space and ensuring that the system is not exploited by fraudulent schemes.
With these initiatives, authorities aim to create a reliable environment that attracts legitimate cryptocurrency businesses, ultimately paving the way for legitimate innovation in the financial landscape.