In a significant regulatory move, Kazakhstan’s Financial Monitoring Agency (AFM) has blocked nearly a thousand cryptocurrency exchanges operating without proper registration. This action underscores the country’s commitment to regulating the digital currency market.
Government crackdown on unregistered exchanges
The AFM’s recent measures, detailed in a December 7 press release, highlight its stringent approach to cryptocurrency exchange oversight. The agency blocked access to 980 platforms in 2023, citing operations without the necessary national license. These platforms served Kazakh citizens, contravening the country’s Digital Assets Law.
Ruslan Ostroumov, the chairman of the AFM, revealed these actions during a meeting of the Eurasian Group on Combating Money Laundering in China. Additionally, the AFM initiated nine investigations into alleged illegal exchange operations and money laundering activities. This rigorous enforcement aligns with Kazakhstan’s broader efforts to combat financial crimes and ensure a secure digital currency environment.
Enacted in February 2023, Kazakhstan’s Digital Assets Law has shaped the country’s digital currency landscape. It prohibits creating and trading digital currencies and cryptocurrency exchange activities without a national license. The Astana International Financial Center (AIFC) is tasked with issuing these licenses, acting within its mandate as a special economic zone.
The law’s stringent requirements have led to blocking of several major international platforms, including Coinbase. In November, Kazakh citizens could not access Coinbase’s website following an order from the Ministry of Culture and Information. This action, reportedly initiated by the Ministry of Digital Development, was based on alleged violations of the Digital Assets Law.
Licensed platforms: A new era in Kazakhstan’s crypto space
Despite the crackdown on unregistered exchanges, the AIFC has approved several operational platforms in Kazakhstan. These include Binance, Bybit, CaspianEx, Biteeu, ATAIX, Upbit, and Xignal&MT. This development signals a new phase in the country’s approach to digital currencies, emphasizing regulated and secure trading environments.
Kazakhstan’s efforts in regulating the cryptocurrency sector reflect a global trend towards greater oversight of digital assets. By enforcing the Digital Assets Law and ensuring that only licensed exchanges operate within its borders, Kazakhstan is positioning itself as a responsible player in the evolving world of digital finance. This balance between innovation and regulation is crucial for the long-term stability and growth of the cryptocurrency market in Kazakhstan and beyond.