A court in the Central Asian nation has sentenced three operators of an illegal crypto exchange to prison as part of a broader crackdown on unlicensed trading platforms.
Play nice or else…
The Financial Monitoring Agency, the AFM shared that these three individuals received sentences ranging from 2.5 to 3.5 years, and their assets, worth around $750,000 were confiscated.
And what did these guys do? They ran a platform without a license, exchanging cryptocurrencies for a fee while using unsecured digital assets and wallets.
The AFM reported that their illegal operations processed over $1.28 million in transactions for about 380 customers. Prosecutors even had bank statements from customers as evidence.
In addition to serving time, the trio lost more than just their freedom, as bailiffs seized their real estate, five cars, a quad bike, and some pricey computer gear.
Licensing requirements for crypto businesses
Kazakhstan has strict laws requiring crypto exchanges to get licensed and operate out of the Astana International Financial Center.
Major players like Binance and Bybit have successfully navigated this process, but clearly, these operators didn’t get the memo.
The crackdown isn’t new at all, it’s part of a larger initiative that ramped up last year. In October, officials announced plans to automatically block bank transfers to crypto exchanges operating outside the AIFC.
The government claims that illegal exchanges are often linked to criminal activities. In fact, AFM data shows that these platforms processed around $18.8 million in drug-related transactions in 2024 alone.
Financial control
Kazakhstan’s efforts have been aggressive, closing down 19 illegal platforms in just the first nine months of 2024, with a total turnover of about $60 million.
And they’re not stopping there, as the AFM is also targeting illegal crypto mining and individuals suspected of conducting unauthorized transactions.
To bolster their efforts, special crypto teams have been formed with the power to freeze wallets and seize coins from suspects. Earlier this year, they even blocked access to over 3,500 illegal online crypto exchanges.
