A court in Kazakhstan has incarcerated three crypto exchange operators as the Central Asian nation intensifies its efforts to combat illicit crypto trading platforms.
The court incarcerated the trio for a period of 2.5 to 3.5 years, according to an official report from the Kazakhstan government’s Financial Monitoring Agency (AFM). Bailiffs seized assets valued at $750,000.
According to the AFM, the three individuals who remain anonymous “operated a platform without a license” and “exchanged cryptocurrencies for a commission.”
The trio allegedly operated crypto wallets, utilized “unsecured digital assets,” and utilized funds received from crypto exchanges whose operations are prohibited in Kazakhstan.
The AFM reported that the illicit exchange executed over $1.28 million in cryptocurrency transactions for approximately 380 customers. Prosecutors submitted bank statements from “customers” as evidence.
Assets confiscated from the triumvirate by bailiffs included “real estate, five vehicles, a quad cycle, and costly computer equipment.”
In accordance with Kazakh law, cryptocurrency exchanges are required to acquire a license and conduct their operations within the Astana International Financial Center (AIFC).
Several international entities, including Binance and Bybit, have effectively obtained permits. Additionally, the AIFC has been the site of the establishment of offices by numerous crypto mining companies.
The Kazakh Agency for Regulation and Development of the Financial Market announced intentions in October of last year to compel banks to automatically block clients’ remittances to crypto exchanges that operate outside the AIFC.
The Kazakh government contends that “criminals frequently employ unlawful crypto exchangers.”
In 2024, criminals utilized illicit exchange platforms to transact $18.8 million in drug-related funds, according to AFM statistics.
The campaign against illicit crypto exchanges in Kazakhstan gained momentum in the early part of the previous year. The AFM has reported that it has shut down 19 illicit platforms in the first nine months of 2024.
It says that the aggregate turnover of these platforms was approximately $60 million. In addition, the AFM is conducting an offensive against illegal crypto mining and individuals whom they believe are engaging in “illegal crypto transactions.”
A special crypto team has been established by the agency and others, which has been granted the authority to block wallets and seize coins from suspects.
The AFM announced earlier this year that it had prevented citizens from accessing “more than 3,500 unlawful online crypto exchanges.”
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