Kazakhstan Seizes $16.7 Million in Virtual Assets in Crypto Crackdown

Kazakhstan has shut down 130 illegal cryptocurrency exchanges suspected of laundering criminal proceeds, seizing virtual assets worth $16.7 million, Deputy Chairman of the Financial Monitoring Agency (AFM) Kairat Bizhanov announced during a recent government meeting. Under Kazakh law, only crypto exchanges licensed by the Astana Financial Services Authority (AFSA) and integrated with local banks are permitted to operate. These licenses are granted under the Law on Digital Assets. Platforms operating without such authorization are deemed illegal. “The activities of 130 unlicensed crypto exchanges involved in laundering criminal proceeds have been terminated this year. Virtual assets worth $16.7 million were seized,” Bizhanov said. Targeting Cash-Out Schemes The AFM is also intensifying efforts to combat illegal cash-out operations. According to Bizhanov, 81 shadow groups with a combined turnover of 24 billion KZT (over $43 million) were uncovered in 2024. He emphasized that ATMs remain a critical vulnerability. “Despite the measures taken, the volume of cash withdrawals continues to grow. A total of 13.2 trillion KZT ($24.1 billion) has already been withdrawn, one trillion more than last year. The main risk is the ability to carry out anonymous transactions without identifying the sender or recipient. These operations are often conducted using bank cards issued to nominal owners,” he said. To curb these practices, the AFM and the National Bank of Kazakhstan have introduced new regulations. Card top-ups exceeding 500,000 KZT ($913) now require the input of an individual identification number (IIN) and confirmation via mobile applications. Since January 1, banks have also been required to retain ATM camera footage for at least 180 days. Authorities plan to expand biometric identification, including facial and fingerprint recognition for all cash transactions. New Rules to Curb Shell Companies In cooperation with the Ministry of Justice and the Ministry of Artificial Intelligence, the AFM has drafted amendments to tighten business registration protocols. “The main focus is on verifying company founders and executives based on risk criteria,” Bizhanov noted, pointing to a surge in fictitious companies used for money laundering and financial fraud. Over the past three years, tax authorities have annulled the registration of 3,600 shell firms linked to 30,000 fraudulent transactions totaling 280 billion KZT ($511 million). As The Times of Central Asia previously reported, Kazakhstan is positioning itself as a regional leader in blockchain innovation, aiming to become Central Asia’s hub for digital asset regulation and blockchain development.

Thousands of Liters of Illegally Sold Fuel Uncovered in Southern Kyrgyzstan

Tax authorities in Kyrgyzstan have uncovered thousands of liters of unmarked fuel during a recent raid in the southern cities of Batken and Osh, the State Tax Service has announced. According to the agency, inspectors discovered 950 liters of unmarked diesel fuel at a gas station in Batken region and an additional 35,547 liters at an oil depot in Osh. “The total volume of unmarked fuel amounted to 950 liters in Batken Region and 35,547 liters in Osh. The materials have been forwarded to supervisory authorities for appropriate legal action,” the service commented. Mandatory fuel labeling was introduced in Kyrgyzstan on October 1, 2024, under legislation requiring both imported and domestically produced fuels to be marked with a molecular identifier. This molecular marker, provided by the State Tax Service, is added to fuel to confirm its legal origin. The system aims to combat fuel smuggling and ensure tax compliance across the oil and gas sector. Kyrgyzstan receives most of its fuel and lubricants from Russia at domestic Russian prices and without export duties. This arrangement makes fuel in Kyrgyzstan considerably cheaper than in neighboring Uzbekistan and Tajikistan, a factor that has contributed to illicit fuel trade in the region. The government’s crackdown underscores its intent to enforce tighter regulatory oversight in a sector prone to tax evasion and smuggling.