Financial authorities in Kazakhstan have targeted at least five online platforms exchanging cryptocurrencies outside the law. Documents, computer equipment, and cryptocurrency wallets have been seized during searches in the northern part of the country.
Kazakhstan’s Financial Watchdog Goes After Unlicensed Crypto Exchange Services
The Financial Monitoring Agency (FMA) of the Republic of Kazakhstan has dismantled a group involved in the illegal exchange of cryptocurrencies. Its members organized the trading through several websites such as kzobmen.com, 1wm.kz, kazobmen.ru, wm007.kz, and kz-exchange.com.
As part of the operation in Kostanay region, searches were carried out at six locations, in which items incriminating the operators of the platforms were seized, the watchdog said in a press release. Its employees confiscated a number of laptops, cell phones, and flash memory sticks, as well as banking and accounting documents.
The authority alleged that the organizers of the online exchangers had received “especially large-scale” income from their business undertaking, without specifying the amount. It also did not reveal how many persons were in the group or their identities.
Investigators were able to establish that they had two crypto wallets at Binance, the world’s largest crypto exchange, with a combined balance of $6,000 in digital assets. Access to these wallets has been temporarily restricted, the FMA noted. More than $200,000 worth of coins were found in wallets with other exchanges.
A pre-trial investigation is underway, according to the announcement. The Financial Monitoring Agency also reminded that these types of activities are allowed only under the special legal regime of the Astana International Financial Center (AIFC).
The Kazakhstan government has been taking steps to regulate the country’s crypto market, which has been growing since the Central Asian nation became a bitcoin mining hotspot following China’s crackdown on the industry in 2021.
In order to operate an exchange platform legally, crypto companies need to obtain regulatory approval and register with Kazakhstan’s financial hub. In October, 2022, Binance was licensed as a provider of crypto exchange and custody services. Earlier that month, it agreed to share information about crypto-related crime with the authorities in Nur-Sultan.