Over a hundred closed cryptocurrency services in Kazakhstan - a blow to the industry or a chance for its legalization? While the market discusses the scale of the crackdown, Europe's largest crypto exchange by traffic, WhiteBIT, is preparing to launch in Kazakhstan and offers an unexpected solution: helping the government and even competitors enter the legal field. At no cost.

We sat down at a roundtable with two key figures in this process: Emil Bagirov, Regional Director of WhiteBIT Kazakhstan, and Maxat Kurmanov, CEO of WhiteBIT Kazakhstan.

The conversation was candid – discussing why they call the closure of illegal platforms a "necessary market cleansing," how to bring 90% of Kazakhstan's crypto turnover out of the shadows, and why WhiteBIT is ready to share its compliance technologies with banks and regulators.

A strike against the "bad guys" or the entire industry?

GNcrypto: What can you tell us about this blocking situation in Kazakhstan? What will this lead to - a flow of clients to licensed platforms, or will users choose even greater anonymity?

Emil Bagirov: First, I want to emphasize: we perceive this step by regulators as an important signal of the need for market cleansing, not as a blow to the industry. Moreover, among the 130 closed exchangers, only part operated in a segment overlapping with WhiteBIT's audience.

Most of them were unofficial, little-known, or speculative exchangers, not large full-fledged exchanges with institutional infrastructure.

Maxat Kurmanov: Today we've been noticing great interest in digital assets in Kazakhstan. But at the same time, currently only 5-10% of turnover occurs in the legal field. Accordingly, the main task is to bring the lion's share of transactions with digital assets out of the shadows. But we need to approach the situation very flexibly. We can't prosecute everyone trying to build a business around the crypto industry - we need to direct them into the legal field and ensure high control.

Maksat Kurmanov, CEO of WhiteBIT Kazakhstan. Source - Maksat Kurmanov

Maxat Kurmanov, CEO of WhiteBIT Kazakhstan. Source - Maxat Kurmanov

$16.7M in confiscated funds: whose money is it?

GNcrypto: There are reports of $16.7M in confiscated assets. In your assessment, are these really criminal funds or could ordinary users have been affected? Is there a mechanism for returning funds to bona fide clients?

Emil Bagirov: This is a complex and sensitive question. In any case, precise information about the status of each case is controlled by law enforcement agencies. It is likely that the majority are funds connected to illegal activities: laundering, fraud, transferring proceeds from shadow schemes.

Were ordinary users affected? This is possible, especially if a person didn't understand the risks and transferred funds through unverified platforms.

Maxat Kurmanov: We interact with all law enforcement agencies worldwide, and we've also signed memorandums in Kazakhstan. I think the criminal turnover in Kazakhstan is much larger, and this was only a small part of it.

We also need to understand that cyber and internet fraud doesn't bypass Kazakhstan, and the potential criminal turnover could be simply catastrophic. We read articles monthly about financial pyramids and hundreds of victims.

Of course, among the confiscated assets there could be funds from ordinary and bona fide citizens. Moreover, there were quite a few criminal cases where ordinary users didn't even know they were conducting illegal operations. Unfortunately, it takes time to fix all this.

As for the return mechanism, ideally the regulator should provide a procedure for checking and returning funds to those who can prove the legal origin of funds and the absence of connection to prohibited schemes. In practice, this is not easy, but I hope and expect that such mechanisms have been developed.

Emil Bagirov, Regional Director of WhiteBIT Kazakhstan. Source - Emil Bagirov

$43M: reality or inflated figures?

GNcrypto: The press reported about "identifying 81 organizations with a turnover of $43M." Are such confiscations realistic, or are authorities exaggerating the scale of the "gray" market (for example, to exaggerate the effectiveness of the law enforcement system)?

Emil Bagirov: I'll emphasize: we don't have regulators' internal data to verify every figure. Such reports are often based on estimates, using blockchain analysis, suspicious addresses, and aggregated P2P data. That is, the figure of $43M may reflect the aggregate turnover of suspicious companies, not their net profits.

Maxat Kurmanov: This is somewhat taken out of context. We were talking about so-called cash-out groups. Indeed, the figures are large - but such is the reality today: some part of the country's economy is seriously in the shadows.

The price of legality

GNcrypto: Speaking about the local AFSA license - how much does it cost? What's the order of magnitude of costs for obtaining and maintaining this license? How long does the process take? What are the main barriers for new players?

Emil Bagirov: The AFSA license is essentially an entry ticket to the legal field. The registration fee itself is relatively low - on the order of a few hundred dollars. However, the main part of the costs goes to creating infrastructure: KYC/AML policies, internal control, information security, legal support and audit. In total, this is already tens of thousands of dollars. In addition, legal participants annually pay supervisory fees - about $25,000 per year.

The license acquisition period usually ranges from six to nine months. It took us a bit longer.

Maxat Kurmanov: The human resources spent, technical development, and direct contracts with international KYC, KYT, Travel Rule providers, IT process architecture are very expensive. This can be millions of dollars. In fact, costs in the Kazakh market are at the level of European regulation and, unfortunately, more expensive than our closest neighbors.

We've been in the registration stage for a little over a year, and now we have a very good product that's already configured and adapted to the realities of our market. We're planning to go into production next week.

Maxat Kurmanov, CEO of WhiteBIT Kazakhstan. Source - Maxat Kurmanov

Biometrics from 2026: the end of privacy?

GNcrypto: Kazakhstan is introducing biometric identification for all cash operations from 2026. Is this true? How will this affect business? Are you technically ready? Aren't you afraid of an outflow of users who value privacy?

Emil Bagirov: According to my data, there are indeed plans to introduce biometric identification in some areas of financial operations, including cash operations. However, there can also be advantages to this. For example, biometric identification can strengthen trust in platforms, facilitate KYC/AML, and simplify fraud protection.

Maxat Kurmanov: Today, similar measures already exist - operations over 2 million tenge ($4,000) are subject to checks. And the regulator is gradually lowering this threshold.

There are risks. After all, in order to capture a small part of illegal operations, the authorities affect ordinary users and complicate the user experience.

As for WhiteBIT itself, we put every user through biometric identification before allowing them onto the platform.

Overall, the sentiment now is that the state is beginning to tighten its grip. A new tax code is coming into effect, and micro and small businesses could suffer quite significantly. The state always says it's our partner, but usually partners give each other something in return, and for now the state offers nothing.

And it's not without absurdity. For example, crypto exchanges are required to report threshold operations of 5,000,000 tenge ($9,000) to the Financial Monitoring Agency. Moreover, the wording of this norm can be interpreted such that we may be obliged to report on users' transfers between their main and trading balances. Naturally, this is useless information and unnecessary technical loads on systems.

KZTE: ally or competitor?

GNcrypto: Kazakhstan is preparing to launch the national stablecoin KZTE. Is this an ally or competitor for the blockchain community? Will you be obliged to list KZTE?

Emil Bagirov: Launching a national stablecoin is an interesting and strategically important initiative. Such a coin can increase overall trust in the digital economy, reduce friction between fiat and crypto instruments, and stimulate infrastructural integration. With proper implementation, it will work as a bridge, not as a replacement.

The main thing is for the regulator to choose balance, not dominance.

Maxat Kurmanov: We now support any initiatives aimed at developing digital finance as such. Kazakhstan is one of the first countries actively engaged in launching CBDC. We're familiar with the goals and implementation plans for KZTE, so we definitely support this project.

I think in the first period this will give a certain boost to the development of "fiat-crypto" solutions and crypto payments for businesses. Therefore, we'll definitely list it and give our users access. And by the way, we're thinking about our own stablecoin in the near future, considering the European team's experience and Kazakhstan's investment attractiveness.

Banks vs. crypto exchanges: who controls the money?

GNcrypto: Please comment on the requirement for integration with local banks - who actually controls the funds? Have there been cases where banks blocked legitimate transactions from crypto exchange clients?

Emil Bagirov: The requirement for fiat transfers through banks is a logical step by regulators designed to ensure control, transparency, and compliance with AML/CTF standards. But, of course, this imposes significant operational restrictions and creates "bottlenecks."

I would highlight three key problems:

Banks are not yet ready to work with crypto exchanges and don't have enough tools.
Bank compliance is not familiar with what checks are conducted on the exchange side and how deep they are.
Difficulties arise with correspondent banks, among which there is also wariness toward the industry.

Maxat Kurmanov: Today, unfortunately, fiat gateways are insufficiently developed in Kazakhstan due to restrictions on working with payment organizations. International payment systems Visa/Mastercard are very cautious and require banks to meet certain standards and obtain additional licenses for servicing crypto exchanges in terms of acquiring.

We're extremely dissatisfied with the current fiat solutions on the market. Plus, the National Bank introduced mandatory confirmation of the origin of funds for fiat payments from $1,000.

But by the way, WhiteBIT offers a solution: on our side, we're trying to build a unified channel where the bank, we, and the regulator can have access to the information they need at any stage of payment processing. We approach banks with proposals to strengthen their compliance services, as we have the experience, infrastructure, and willingness to share everything we have with them. And we're ready to do this absolutely free of charge.

Will there be another wave of crackdowns?

GNcrypto: 130 exchanges have allegedly been closed, but crypto activity in Kazakhstan continues to grow. In your assessment - is this a one-time operation or the beginning of systematic checks? Do you feel pressure from regulators despite having a license?

Emil Bagirov: I'm inclined to think we're witnessing the beginning of systematic strengthening of oversight, not a one-time operation. In many jurisdictions, including Kazakhstan, such an initial "cleanup" is a signal to the market: "Look what happens to those outside the rules." After this, more targeted checks begin, transaction monitoring, selective audits, platform behavior monitoring.

Maxat Kurmanov: In Kazakhstan, many processes proceed in a similar manner: as soon as the temperature in the hospital starts rising, government agencies demonstrate their capability and strength.

We, for our part, are for a systematic approach. I'll repeat: we're ready to share international experience, knowledge, and a patriotic desire to make the crypto market at home more transparent, innovative, and to be a leader in this big agenda.

The main takeaway

The legal market is ready for dialogue, open to cooperation with regulators, ready to share technologies. The question is - is the state ready for a real partnership with the industry? Or will tightening control remain the only management recipe?

Reference:

Emil Bagirov - Regional Director of WhiteBIT Kazakhstan
Maksat Kurmanov - CEO of WhiteBIT Kazakhstan
WhiteBIT - Europe's largest crypto exchange by traffic, obtaining an AFSA license in Kazakhstan

As a reminder, we also previously received a comment from Dauren Karashev, head of the National Blockchain Association, on the situation with the shutdown of cryptocurrency platforms in Kazakhstan.

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