Kazakh courts have sentenced crypto exchange operators to jail as part of an ongoing crackdown on cryptocurrency activities.

A court in Kazakhstan has sentenced three cryptocurrency exchange operators to jail terms of 2.5 to 3.5 years, and seized assets valued at $750,000, according to a report by the country's Financial Monitoring Agency (AFM). The individuals were found guilty of operating an unlicensed platform for exchanging cryptocurrencies for a fee. They utilized unsecured digital assets, managed crypto wallets, and handled funds from exchanges prohibited in Kazakhstan. The illegal exchange processed over $1.28 million in transactions for 380 customers, as evidenced by bank statements provided by prosecutors. Assets seized include real estate, five cars, a quad bike, and computer equipment. Kazakh law mandates that crypto exchanges obtain a license and operate within the Astana International Financial Center (AIFC), with international players like Binance and Bybit successfully securing permits. In October 2023, the Kazakh Agency for Regulation and Development of the Financial Market proposed forcing banks to block transfers to crypto exchanges operating outside the AIFC. The government claims that illegal exchanges are often exploited by criminals, processing $18.8 million in drug-related funds in 2024. Kazakhstan's crackdown on illegal crypto exchanges began in early 2024, with the AFM closing down 19 such platforms in the first nine months, totaling a turnover of around $60 million. The agency is also targeting illegal crypto mining and individuals suspected of "illegal crypto transactions", forming special crypto teams with powers to freeze wallets and seize coins. Earlier this year, the AFM blocked citizens from accessing over 3,500 illegal online crypto exchanges.