Kazakhstan has taken strict measures against the operation of illegal cryptocurrency exchanges, recently blocking over 3,500 platforms that were found to be operating contrary to the nation’s regulations. This action followed collaborative efforts between various governmental bodies, including the National Security Committee and the Ministry of Culture and Information.
In the preceding year, authorities revealed their commitment to enforcing digital asset laws by preventing access to platforms like Coinbase, which allegedly infringed upon these regulations. Furthermore, the regulatory body reported significant progress in dismantling illegal operations by liquidating 36 crypto exchanges in 2024, generating a staggering turnover of 60 billion Kazakhstani tenge, equivalent to more than US$113 million. In this operation, authorities froze and confiscated roughly 4.8 million USDT, a widely used stablecoin.
Investigations also led to the identification of two cryptocurrency pyramid schemes. Victims of these fraudulent schemes have begun to see restitution, with 545,000 USDT returned to those affected. Additionally, 120,000 USDT held by the scam platforms was also frozen to mitigate further losses.
The regulatory body, AFM, asserted its ongoing collaboration with international partners aimed at enhancing oversight of cryptocurrency transactions, particularly to prevent criminal exploitation of these systems. Recent amendments to existing legislation have been introduced, establishing clear accountability for digital asset providers in instances of money laundering. Moreover, regulatory mechanisms concerning cryptocurrency transactions in financial institutions have been fortified.
AFM is dedicated to refining its monitoring capabilities to effectively track financial transactions linked to virtual assets, which are often susceptible to criminal schemes.
In a contrasting development, leading global cryptocurrency exchanges are increasingly establishing a foothold in Kazakhstan. Bybit, for instance, successfully obtained a full crypto exchange license from the Astana Financial Services Authority (AFSA) in 2023, while Binance is making strides toward securing its own full regulatory license, having received formal consent from AFSA.
Additionally, the National Bank of Kazakhstan is piloting a program to investigate the potential development of the digital tenge, a central bank digital currency (CBDC). This initiative has showcased improvements in the processing of value-added tax (VAT) reimbursements through the new digital fiat system.
Overall, Kazakhstan is actively balancing the need for rigorous regulation of cryptocurrency markets while also welcoming the growth of legitimate platforms within its financial landscape. The initiatives reflect a multifaceted approach aimed at both safeguarding consumers and fostering innovation in digital financial services.