Kazakhstan Cracks Down on Crypto Crime to Cement Blockchain Hub Ambitions

Kazakhstan's Financial Monitoring Agency (AFM) has intensified its enforcement of cryptocurrency regulations, shutting down 130 unlicensed crypto exchanges and seizing approximately $16.7 million in digital assets in 2025. The crackdown targets platforms operating outside the legal framework established by the Astana Financial Services Authority (AFSA), which requires exchanges to be licensed and integrated with local banking systems. Deputy Chairman of the AFM, Kairat Bizhanov, confirmed that the seized assets were linked to illicit activities, including money laundering and criminal fund processing. The agency also uncovered 81 underground networks facilitating the conversion of cryptocurrencies into cash, with combined turnover exceeding $43 million in 2024.

The enforcement actions reflect a broader effort to combat anonymous transactions and financial crimes. Authorities reported that cash withdrawals through ATMs surged to $24.1 billion in 2024, a $1 billion increase from the previous year, with many transactions involving bank cards registered under fictitious names. To address this, the AFM and National Bank of Kazakhstan have introduced stricter regulations. Card top-ups exceeding 500,000 KZT ($913) now require individual identification number (IIN) verification and mobile app confirmation. Banks are mandated to retain ATM camera footage for at least 180 days, with plans to expand biometric verification, including facial and fingerprint recognition, for all cash transactions.

The crackdown has also targeted fictitious companies used for money laundering. Over the past three years, tax authorities have canceled 3,600 shell firms linked to 30,000 fraudulent transactions, totaling $511 million in illicit activity. The AFM, in collaboration with the Ministry of Justice and the Ministry of Artificial Intelligence, has drafted amendments to strengthen business registration protocols, focusing on verifying company founders and executives based on risk criteria.

Kazakhstan's regulatory push aligns with its ambition to position itself as a regional blockchain hub. The government has announced plans to establish a state crypto reserve, funded by confiscated digital assets and state-run mining operations. This initiative, managed under the National Bank, aims to balance innovation with financial stability. In September 2025, Kazakhstan launched its first national crypto reserve, the Alem Crypto Fund, which selected BNB as its initial asset through a partnership with Binance Kazakhstan. The country has also introduced a digital tenge (CBDC) project, with a full rollout expected by year-end, and launched Central Asia's first spot Bitcoin ETF in August.

The enforcement actions follow earlier measures in 2024, when regulators shut down 36 unlicensed exchanges with a combined turnover of $112.8 million. Authorities also blocked access to over 3,500 unregistered crypto websites and froze $4.8 million in assets. These efforts underscore Kazakhstan's dual strategy of fostering legitimate crypto infrastructure while curbing illicit activities. President Kassym-Jomart Tokayev has emphasized the need for rapid adaptation to the digital economy, proposing the creation of a State Fund of Digital Assets to build a strategic reserve from promising digital assets.

The regulatory environment has drawn international attention, with Kazakhstan's approach compared to global trends in crypto oversight. The country's actions mirror initiatives in the U.S. and EU, where frameworks like the GENIUS Act and MiCA law aim to standardize stablecoin regulations and enhance investor protections. However, Kazakhstan's model is distinguished by its focus on state-driven integration, including projects like "CryptoCity" in Alatau, a pilot zone for crypto-based payments and blockchain innovation.

---

Source: [1] The Crypto Times (https://www.cryptotimes.io/2025/10/08/kazakhstan-targets-unlicensed-crypto-platforms-seizes-16-7m/)

Source: [2] Shib Social Feed (https://news.shib.io/2025/10/09/kazakhstan-shuts-130-illegal-crypto-exchanges-seizes-16-7m-in-assets/)

Source: [3] Cointelegraph (https://cointelegraph.com/news/kazakhstan-closes-130-crypto-exchanges-seizes-16-7-million)

Source: [4] Analytics Insight (https://www.analyticsinsight.net/news/kazakhstan-seizes-167m-and-shuts-130-illegal-crypto-platforms)

Source: [5] Cryptonews (https://cryptonews.com/news/kazakhstan-seizes-16-7m-from-unlicensed-crypto-exchanges-shuts-down-130-platforms/)

Source: [6] Hodl FM (https://hodlfm.com/regulation/kazakhstans-expansion-of-crypto-infrastructure/)

Source: [7] CoinRank (https://www.coinrank.io/crypto/global-crypto-policy-outlook/)