Why Freedom Bank Kazakhstan Incurred Losses of 4.8 Billion Tenge in April 2025

And Why It Blocked Clients’ Accounts Involved in Forex Transactions Without a Court Order

Clients of Freedom Bank Kazakhstan are filing lawsuits over what they consider unlawful account freezes and significant withdrawals made by the bank. The statements of claim appear to be nearly identical. Hronika.kz reports a couple of examples.

One of the lawsuits was filed by Gabit Kapargazin. In his statement, he asks the court to declare the bank’s April 28, 2025 notice, regarding the cancellation of his transactions and the return of funds, as unlawful and to annul it. He also demands that all restrictions on his accounts and cards be lifted and seeks to recover more than 56 million tenge:

“I am a user of the bank’s services, as well as the holder of bank cards and accounts. I used the official public function — currency trading on the FOREX platform integrated into the Freedom SuperApp mobile application. Using the provided interface, I acted in good faith, using only personal and borrowed funds for all operations.

On April 15, 2025, Freedom Bank Kazakhstan, without any warning or notice, blocked his cards, accounts and the mobile application containing his funds. He received no explanation or information from the bank.

On April 17, 2025, he received an SMS stating that his payment card had been temporarily blocked and that recent transactions were under review.

On May 5, 2025, he received a notice of cancellation of his orders and a refund dated April 28, 2025, stating that his total profit on the cancelled orders amounted to 65,711,541 tenge. The amount was not final, as the internal investigation was still underway, and additional orders might be subject to cancellation. Within one business day from receiving the notice, the bank would exercise its right to withdraw 55,657,284 tenge from his accounts, and he was required to return the remaining 8,945,315 tenge within 15 calendar days.

On May 6, 2025, the funds belonging to him — 56,011,946.75 tenge held in his deposit account — were unlawfully debited by the bank on the ground of an alleged technical malfunction. The bank unlawfully blocked all his accounts and cards and withdrew funds without a valid court decision, enforcement proceedings or a ruling from law enforcement authorities. This grossly violated his constitutional rights, intimidated him, and pressured him to return the money he had legitimately invested and earned. Thus, Freedom Bank Kazakhstan is pursuing purely selfish goals aimed at unjust enrichment at his expense.”

Another lawsuit came from Zulfiya Beysekeyeva, who stated:

“On January 23, 2025, through the online process in the Freedom Bank Kazakhstan SuperApp, I applied for a ‘Deposit Card’. To access exchange operations, I signed an agreement enabling currency exchange on the Forex platform. Under this agreement, I deposited 2,580,000 tenge into my accounts at the bank.

Between January and April 2025, I conducted currency exchange operations (buying and selling). As a result, I earned a profit of 23,224,688 tenge.

On April 15, 2025, the bank temporarily blocked my accounts linked to the Deposit Card. On April 17, I received an SMS notification.

On April 28, 2025, the bank notified me of the cancellation of previously executed orders from January to April 2025 and the withdrawal of my profit amounting to 23,224,688 tenge.

According to the Financial Market Regulatory Agency of Kazakhstan, what the bank called a ‘technical glitch’ was in fact an information security incident, not a technical malfunction. The KPMG report and the AFSA findings cannot be considered reliable evidence of a ‘technical glitch’. I did not enter into a brokerage services agreement with the bank, nor did I open a brokerage account for trading on the Kazakhstan Stock Exchange (KASE).”

Both Kapargazin and Beysekeyeva ultimately lost their lawsuits. The court ruled that the bank’s cancellation of orders and withdrawal of funds “did not violate the plaintiff’s property rights because the incident resulted from a technical error identified by a third party — the Agency — during a preliminary inspection.” The court also noted that the absence of actual trades was confirmed by the stock exchange. “Under these circumstances, the temporary blocking of accounts was a necessary protective measure during the investigation,” the rulings stated.

However, the most interesting aspect of these cases is not just the extrajudicial blocking of accounts and seizure of client funds, but the explanation for the technical malfunction — which the court records describe in detail.

On April 14, 2025, the bank detected a significant volume of operations involving the sale of Russian rubles — roughly 900 million rubles — on the Forex platform integrated with KASE. However, the corresponding trades did not actually take place on KASE, which resulted in bank losses totaling 4,804,638,368.14 tenge.

An internal report by the bank’s Information Security Department dated April 24, 2025, confirmed that the incident was caused by a vulnerability in the Apache MINA v2.3.0 library (CVE-2021-41973), which resulted in a number of orders being assigned the status COMPLETED despite no real trades taking place on KASE.

The malfunction in the SuperApp led to a security incident that “caused the improper functioning of the bank’s electronic information resource (the SuperApp mobile application), resulting in significant financial losses and halting the Forex trading process.”

Following the suspension of the Forex platform, the bank notified clients about order cancellations and refunds and temporarily suspended access to their bank accounts and cards.

A KPMG advisory report dated July 21, 2025, also confirmed the erroneous assignment of order statuses and the unjustified financial gains received by clients.

On May 21, 2025, the bank filed a complaint with the police department in Kyzylorda region, requesting an investigation into alleged theft of funds by certain individuals.

On July 22, 2025, the Financial Markets Regulatory Agency opened an administrative case against the bank. According to the administrative protocol dated July 10, 2025 (Article 215-1, Part 1, Clause 12 of the Code of Administrative Offenses), the bank was fined 983,000 tenge, which was paid on July 25.

The Agency also stated in court that a selective inspection of the bank’s activities was conducted from June 23 to August 4, 2025, including the Forex operations:

“Preliminary results revealed violations of banking legislation in the area of information security, including the failure of the bank’s incident response service. Significant volumes of foreign currency sales conducted via the Forex channel on April 14, 2025, had no corresponding trades on KASE, leading to losses of 4.8 billion tenge. The bank committed an administrative offense by failing to ensure its incident response service functioned properly.”

Note that the bank immediately acknowledged the violation identified by the regulator and paid the fine. This can be seen less as goodwill and more as an acknowledgment of a serious security breach in its own mobile application.

So, if you ever decide to trade currencies on Forex using the Freedom Bank Kazakhstan mobile app — and suddenly start making big profits — don’t rush to celebrate. It might just be another technical glitch. And instead of enjoying your newly earned millions, you could find all your accounts blocked.

As court practice shows, luck almost always favors the bank, not its clients.

Photo: bankffin.kz.

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