Kazakhstan shuts down 130 illegal crypto platforms, seizes $16.7 million in digital assets

• Kazakhstan shut down 130 unlicensed cryptocurrency platforms and seized $16.7 million in digital assets in 2024. The country’s Financial Monitoring Agency (AFM) targeted money laundering and illicit finance, uncovering 81 underground networks processing $43 million in transactions.
• While promoting itself as a regulated crypto hub, Kazakhstan is tightening oversight, including biometric verification (facial/fingerprint) for cash withdrawals. New rules require sender ID verification for bank card top-ups over $925, and banks must retain ATM footage for 180 days.
• Authorities deregistered 3,600 shell companies linked to 30,000 fraudulent transactions worth $500+ million over three years. $24.1 billion in suspicious cash withdrawals occurred in 2024, often via bank cards under fictitious names.
• Kazakhstan’s biometric push is seen as a bold experiment in financial transparency but raises privacy abuse risks. Experts warn that centralized biometric databases could enable government surveillance and identity theft.
• The country lists 20 approved crypto service providers, including major exchanges like Bybit and WhiteBIT. Kazakhstan is pioneering stablecoin regulatory fees, a state-backed crypto reserve and a spot Bitcoin fund – reflecting a global trend of regulated crypto ecosystems.

In a sweeping effort to cleanse its burgeoning financial sector, the government of Kazakhstan has shuttered 130 unlicensed cryptocurrency platforms and seized $16.7 million in digital assets this year.

The aggressive enforcement action led by the country’s Financial Monitoring Agency (AFM) targets money laundering schemes and illicit finance, unfolding even as the Central Asian nation actively promotes itself as a regulated hub for cryptocurrency innovation. The crackdown detailed by AFM Deputy Chairman Kairat Bizhanov focused on platforms functioning as crypto exchangers rather than major centralized exchanges.

These unlicensed services were implicated in processing criminal proceeds, with authorities uncovering 81 underground networks that converted cryptocurrency into cash, handling transactions exceeding 24 billion Kazakhstani tenge ($43 million). The scale of illicit financial activity is further illustrated by the sheer volume of cash withdrawals, which reached 13.2 trillion tenge ($24.1 billion) in 2024, a significant portion of which was funneled through bank cards registered under fictitious names.

Astana’s dual strategy of embracing digital assets while imposing stringent oversight highlights a global regulatory tightrope walk, where the pursuit of financial transparency increasingly intersects with the expansion of state surveillance. Over the past three years, Kazakhstani tax authorities have deregistered 3,600 shell companies linked to some 30,000 fraudulent transactions valued at over $500 million.

Kazakhstan is implementing a series of robust countermeasures. All bank card top-ups exceeding 500,000 tenge (approximately $925) will now require mandatory verification of the sender’s Individual Identification Number (IIN), a reversal of previous rules that only mandated the recipient’s IIN. Banks are now required to store ATM surveillance footage for a minimum of 180 days, and authorities plan to expand the use of biometric verification – including facial and fingerprint recognition – for cash withdrawals.

Kazakhstan’s biometric banking: Innovation or digital tyranny?

This move toward linking physical identity to financial activity has drawn attention from international observers. Cybercrime consultant David Sehyeon Baek described Kazakhstan’s initiative as “one of the boldest experiments in tying physical identity to financial transparency.” He nevertheless cautioned that such systems must balance anti-crime objectives with the risk of privacy abuses and the potential misuse of permanent biometric databases.

Meanwhile, Brighteon.AI‘s Enoch warns that “biometric verification for bank transactions poses serious security risks as breaches could expose highly sensitive personal data, leaving individuals vulnerable to identity theft and financial fraud. Additionally, centralized biometric databases enable government and corporate surveillance, eroding privacy and increasing the potential for abuse by authoritarian regimes or malicious actors.”

This enforcement push exists alongside Astana’s proactive steps to legitimize and lead in the digital asset space. The national register currently lists 20 approved digital asset service providers, including major international exchanges like Bybit and WhiteBIT. The country has pioneered the payment of regulatory fees in stablecoins, launched one of Central Asia’s first spot Bitcoin funds and is moving to establish a state-backed crypto reserve that may incorporate seized or state-mined digital currencies.

This two-pronged approach mirrors a wider global trend, seen in the U.S. and European Union, of building regulated crypto ecosystems that attempt to foster innovation while enforcing accountability. The situation in Kazakhstan represents a modern financial paradox, where a nation’s ambition to become a center for technological innovation is fundamentally linked to its capacity for stringent financial monitoring.

The closure of 130 platforms and the seizure of millions demonstrate a clear intent to curb the lawlessness that has often plagued the crypto frontier. Yet, the concurrent rollout of extensive identity verification and biometric tracking in the Central Asian country raises profound questions about the future of financial privacy.

Watch this video about gold monetization in Kazakhstan.

This video is from the bearcorner101 channel on Brighteon.com.

Sources include:

CoinTelegraph.com

AnalyticsInsight.net

Brighteon.ai

CryptoTimes.io

Brighteon.com