Kazakhstan Shuts Down Over 3,500 Illegal Crypto Platforms and Seizes Millions in War Against Money Laundering

Surge in Regulatory Action Against Illegal Platforms in Kazakhstan

Kazakhstan's government has intensified its efforts to combat illegal cryptocurrency exchanges operating within its borders, as part of a broader crackdown on money laundering and financial crime.

These exchanges, often unlicensed, have been found to facilitate illicit activities, including fraudulent transactions and money laundering schemes.

On 6 January 2025, Kazakhstan's Financial Monitoring Agency (FMA) revealed that a significant operation had dismantled 36 unlicensed exchanges, seizing assets worth millions of dollars.

A Major Blow to Criminal Activity and Unlicensed Exchanges

The Financial Monitoring Agency, working alongside the National Security Committee and the Ministry of Culture and Information, took down 36 illegal crypto exchanges that were operating without proper authorisation.

The total turnover of these exchanges was approximately 60 billion Kazakhstani tenge ($112.8 million).

Of this, 2.5 billion tenge (about $4.8 million) in assets were seized and frozen during the operation.

Authorities also identified that many of these exchanges were being used as intermediaries for criminals, allowing them to exchange fiat currency for cryptocurrencies and vice versa, often with no traceable records.

This anonymity made them a target for cyber fraudsters, drug dealers, and other malicious actors.

Crackdown Success: Illegal Exchanges and Pyramid Schemes Targeted

The crackdown has not only focused on unlicensed exchanges but also on crypto pyramid schemes that use these platforms to attract investments unlawfully.

Two such schemes were exposed and shut down, with authorities recovering $545,000 and freezing an additional $120,000 pending further investigations.

According to the FMA, these actions are part of the agency's larger strategy to curb the use of cryptocurrencies in criminal activities.

The Government’s Efforts to Strengthen Anti-Money Laundering Measures

As part of Kazakhstan’s increased focus on eliminating financial crime, the FMA has introduced amendments to its legislation to hold digital asset providers accountable for violations of anti-money laundering (AML) policies.

Kazakhstan’s Financial Monitoring Agency

These changes aim to make it harder for illegal exchanges to operate without proper checks, such as verifying the identities of users and monitoring transactions for suspicious activity.

In response to the recent successes, the FMA has stated its commitment to continuing collaboration with international organisations to further strengthen control over cryptocurrency transactions and reduce their criminal use.

Declining Bitcoin Mining in Kazakhstan Amid Stricter Regulations

In the past, Kazakhstan was a popular hub for Bitcoin mining, largely due to its favourable regulations and low electricity costs.

However, with the government's heightened crackdown on crypto-related criminal activity, the country’s contribution to global Bitcoin mining has dwindled to less than 5%.

Stricter regulations have caused many miners to relocate to countries with more lenient rules, significantly impacting Kazakhstan’s position in the global crypto market.

Growing Efforts to Tackle Illegal Platforms and Financial Crime

The actions taken in early 2025 are part of an ongoing campaign to eliminate unlicensed crypto platforms.

In 2024, the FMA, in collaboration with other agencies, shut down 980 illegal exchanges and launched nine investigations into money laundering activities.

In total, more than 3,500 illegal platforms have been taken offline by Kazakhstan’s authorities in recent years, as part of a broader effort to ensure the country is not used as a hub for financial crime.

Despite the crackdown on illegal platforms, globally recognised exchanges such as Binance, Bybit, and Upbit continue to operate legally in Kazakhstan, with the FMA ensuring that they comply with the country’s stringent anti-money laundering policies.

With these continued efforts, Kazakhstan is sending a strong message about its commitment to stamping out illegal crypto operations and protecting its financial system from criminal abuse.