Kazakh authorities are seizing millions of US dollars worth of cryptocurrency as part of an investigation into the Ponzi scheme that seduces investors across the region.
The Financial Pyramid Scheme has been active in parts of Central Asia and Eastern Europe for several years, providing victims with a high return on investment in a variety of crypto projects.
Kazakhstan defeats a giant crypto pyramid
Amir Capital, an entity disguised as an international investment fund, is currently under investigation in Kazakhstan, which is allegedly operating a crypto-ponzi scheme.
The company has actively sought funds from Kazakhstan citizens and several other former Soviet countries, including Kyrgyzstan, Belarus and Russia, the Central Asian financial watchdog said.
The agency, detailed in a press release on Thursday, provided potential victims with 5-10% revenue from cryptocurrency trading, mining and investments on various projects.
Investors had to register on the platform’s website and create a personal account. They were asked to deposit the amount into several cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Stablecoin Tether (USDT).
Authorities are seeking the seizing of $10 million in digital assets
Subsequently, some of the funds received were redistributed among participants previously adopted in the pyramid-style structure, and new members used the money deposited to pay interest.
Amir Capital restricted its withdrawal at the end of 2021. The manager was attributable to a technical issue that he had promised to resolve this, but access to customer balances never recovered.
Investigators said they have acquired a court order to seizure crypto assets that are compatible with more than $10 million, as well as a parcel of land in the Almaty area.
More than 40 people are believed to have been involved in crime planning, according to officials from the Local Government Bureau (AFM) of Almaty, the largest city in Kazakhstan, which is leading an ongoing investigation.
One of the alleged organizers of the Ponzi scheme, a female suspect whose identity was not revealed in the announcement, has been arrested and taken into custody for two months.
Kazakhstan’s opening to Crypto has challenges
The emergence of crypto-related criminal organizations, such as the recently busted large pyramid scheme, appears to be a side effect of Kazakhstan rising rapidly in the crypto space over the past few years.
Central Asian countries have become Bitcoin mining hotspots after China’s decision to enforce a ban on crypto-related activities, including digital coin minting and trading in 2021.
That same year, Kazakhstan’s power grid was overwhelmed by the influx of miners, low power rates and faced energy shortages until authorities addressed the issue through restrictions and pricing.
At the same time, the Astana government took steps to leverage the industry’s interests and legalize and regulate the market. Currently, we plan to expand our licensing structure and add more replacements.
In early June, the National Bank of Kazakhstan took a look ahead to the project issuing crypto payment cards, and local banks began testing their first offerings in early September. In August, the Kazakhstan-based exchange announced a list of countries and a list of the first Bitcoin ETFs.
Criminals are also taking advantage of openings to Kazakhstan’s crypto assets. In August, financial and law enforcement officials revealed that they had unraveled a scheme to mine cryptocurrency on illegally supplied electricity to the state over $16 million.
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