Money Laundering through Cryptocurrencies: Assessing the Use of Artificial Intelligence in Financial Monitoring Agency of Kazakhstan

Abstract

This research explores the idea of adopting Artificial Intelligence (AI) to monitor cryptocurrency and evaluates whether it is economically feasible for Kazakhstan, considering current technological and legal conditions. Cryptocurrencies enable fast and borderless value transfers, while also facilitating money laundering through various techniques which complicates detection of such transactions due to the anonymous nature of these. Building on FATF-standards and the emerging literature on AI-enabled AML (anti-money laundering), this study applies a qualitative case-study design focused on Kazakhstan’s regulatory environment, where most crypto-related activities are limited outside the Astana International Finance Center (AIFC). Empirical evidence consists of ten semi-structured interviews with experts (conducted anonymously due to topic sensitivity), documentary analysis of regulatory materials and international practice. Findings display partial readiness of Kazakhstan for AI-driven crypto monitoring. Although the FMA already uses the hybrid approach, there are limitations. In addition to this, phased hybrid strategy allows the most viable balance between effectiveness, cost and institutional sustainability.