Kazakhstan enforces ban on 3,500 illegal crypto exchanges
Kazakhstan has been making headlines for its stringent approach to regulating cryptocurrencies. By shutting down over 3,500 illegal exchanges, the country is setting an example for the global crypto community. The latest effort by the Kazakh regulator, AFM RK, underscores its commitment to digital asset legislation.
Details of the crackdown
Cryptocurrency use in Kazakhstan has been on the rise, mirroring a global trend. To protect consumers and maintain financial stability, the government has established a comprehensive framework to monitor, supervise, and regulate digital asset activities.
The AFM RK’s recent announcement highlighted the scale of the crackdown. The National Security Committee and the Ministry of Culture and Information collaborated with AFM RK to dismantle illegal exchanges and curb their use in criminal activities, thereby safeguarding the financial system’s integrity.
Kazakh authorities have shut down over 3,500 illegal cryptocurrency exchanges. These platforms, operating without proper licensing and violating the country’s strict digital asset laws, are now banned. This move reduces the risk of financial fraud and money laundering.
Liquidation of illegal crypto platforms
In 2024, authorities intensified their efforts by dismantling 36 illegal crypto exchanges with a combined turnover exceeding US$113 million. Assets worth 4.8 million USDT were also frozen and confiscated. Notably, in 2023, Kazakh authorities blocked access to Coinbase for violating the country’s digital asset laws.
The crackdown also uncovered two major cryptocurrency pyramid schemes. Authorities successfully returned 545,000 USDT to victims and froze an additional 120,000 USDT held by the schemes. This recovery effort underscores the government’s commitment to protecting its citizens.
“AFM continues to work with international partners to enhance control over crypto transactions and combat their use for criminal purposes. Amendments to the legislation have also been developed, introducing liability for providers of digital assets in cases of money laundering violations. Checks on cryptocurrency transactions in financial institutions have been strengthened,” stated the regulatory announcement (translated from Russian).
Kazakhstan’s regulatory bodies are working with international partners to enhance control over cryptocurrency transactions. This collaboration aims to prevent the use of virtual assets for criminal purposes, reflecting a broader global initiative.
The regulatory announcement concluded, “AFM will continue to improve tools for effectively monitoring financial transactions to combat criminal schemes involving virtual assets.”
Crypto exchange market in Kazakhstan
Despite the crackdown on illegal operations, major global crypto exchanges like Bybit and Binance have expanded their presence in Kazakhstan. There are 21 licensed digital asset service providers in the country, including well-known platforms like Binance, Bybit, ATAIX Eurasia, and Biteeu. These companies have obtained full regulatory licenses and demonstrate their dedication to following regulations and working closely with local authorities.
The National Bank of Kazakhstan has launched a pilot programme to explore the digital tenge, a central bank digital currency (CBDC). This initiative aims to modernise financial transactions and enhance processes such as VAT reimbursements through digital fiat.
Currently, crypto exchanges are restricted to operating within the Astana International Financial Centre (AIFC), a trade and financial zone located in Astana. This environment requires a delicate balance between control and innovation for digital asset providers.
