Kazakhstan Tightens Crypto Rules After Seizing $16.7M From Unlicensed Exchanges

Kazakh financial authorities have terminated operations at 130 unlicensed crypto platforms and confiscated $16.7 million in digital assets during a nationwide enforcement campaign targeting money laundering operations.

Kairat Bizhanov, the Deputy Chairman of the country’s Financial Monitoring Agency, disclosed the enforcement results at a government briefing, noting how domestic law restricts crypto trading to platforms holding licenses from the Astana Financial Services Authority and maintaining integration with the traditional banking system, according to a report by The Times of Central Asia.

Financial monitors also exposed 81 clandestine networks specializing in converting crypto to cash, with aggregate transaction volumes exceeding $43 million. 

Bizhanov highlighted persistent vulnerabilities in the cash-based financial system, saying criminals exploit bank cards registered under false identities to facilitate untraceable fund transfers between anonymous parties.

Nationwide ATM cash extraction reached $24.1 billion over the measurement period, representing a $1.8 billion increase from the prior year, with ATMs remaining a critical weak point in the system.

Authorities responded with stringent control mechanisms by loading more than $913 onto payment cards, which now trigger mandatory identity verification through government databases and mobile authentication. 

Financial institutions must preserve surveillance footage from ATMs for six months while regulators prepare to mandate biometric authentication, facial recognition, and fingerprint scanning for all cash-based transactions, according to the report.

When asked whether such measures could serve as a template for developing economies or constitute excessive financial surveillance, cybercrime consultant David Sehyeon Baek told Decrypt the initiative represents “one of the boldest experiments in tying physical identity to financial transparency.”

“On paper, it deters impersonation and makes compliance measurable,” he said, warning that without proper oversight, such systems could “turn into instruments of surveillance.”

Baek stressed that nations implementing comparable systems “must weigh proportionality carefully—ensuring that anti-crime objectives do not erode citizens’ rights to privacy or create permanent biometric databases vulnerable to misuse.”

“In the right hands, biometrics can strengthen digital trust; in the wrong ones, it can normalize total financial visibility,” he explained.