Last Updated: October 12, 2023
• Kazakhstan authorities have shut down a crypto exchange, ABS Change, that processed $34 million through Binance wallets.
• The exchange was operating without a license and law enforcement confiscated over $350,000 in cash and crypto assets.
• The government has been working to regulate the crypto industry with laws restricting access to low-cost power for miners.
Kazakhstan Shuts Down Illegal Crypto Exchange
Authorities in Kazakhstan have busted an illegal crypto trading platform, seizing over $350,000. The Digital Asset Exchange (ABS Change) had been making millions in turnover since 2021 without a license and has now been closed down by the Financial Monitoring Agency (FMA).
Seizure of Cash and Crypto Assets
During an operation in the country’s capital city, law enforcement officials confiscated $342,000 and 7 million tenge (almost $16,000) in cash. They also identified two wallets on Binance which had another $23,000 worth of crypto assets; these have now been blocked during the ongoing investigation. ABS Change allegedly processed almost $34 million in transactions through those wallets on Binance.
Regulation of Crypto Industry
The FMA has been focusing on preventing “gray” business activities including those relating to cryptocurrencies and stated that Kazakhstan’s shadow economy shrank to below 20% last year. In January they took down several coin trading websites and February saw them seize almost $188,000 worth of property from a Russian national involved in illegal operations.
To regulate the increasing sector of cryptocurrency mining farms using cheap electricity from Kazakhstan, a law was introduced this February that licenses miners and obliges them to sell most of their revenue on domestic-registered exchanges.
Consequences For Operators
The three Kazakhstani citizens accused of running ABS Change are facing serious consequences for their actions as it is illegal to provide crypto trading services outside of Astana International Financial Center (AIFC) where only licensed exchanges are authorized to operate.
The FMA’s move signals Kazakhstan’s commitment to regulating its growing crypto economy as well as clamping down on any activities deemed “gray” or unlawful within its borders. It remains unclear what will happen next with regards to the seized funds but further details may emerge soon as the investigation progresses further.