Governments across the globe like the Kazakhstan government are intensifying efforts to license cryptocurrency service providers. The aim is to establish clear jurisdiction over crypto activities and combat illegal practices like money laundering and terrorism financing. This global trend is in response to the growing concern over consumer protection, particularly in the aftermath of the FTX collapse.
Ministry of Information Blocks Coinbase Access, Approves Binance Exchange
Recent reports from Kazakhstan-based publication Kursiv reveal that the Ministry of Information in Kazakhstan has restricted citizens’ access to the official Coinbase website. The Ministry alleges that Coinbase violated Kazakhstan’s digital asset laws, specifically referencing Clause 5 of Article 11 of the Law on ‘Digital Assets.’ This law prohibits the issuance and circulation of unsecured digital assets and the operation of crypto exchanges for such assets within Kazakhstan, except within the Astana International Financial Center (AIFC).
To operate within the country, companies are required to obtain an AIFC license from the Astana Financial Service Regulatory Commission (AFSA). In a significant development, AFSA granted approval to Binance to launch a regulated crypto exchange in June 2023. Companies seeking approval must follow a rigorous process, including submitting preliminary and complete applications. Binance secured its in-principle approval in August 2022, marking a positive step toward regulatory compliance.
Growing Crypto User Base in Kazakhstan
As of 2023, the country boasts approximately 1.48 million crypto users, indicating a crypto penetration rate of 7.61% in the Central Asian country. Statista data suggests this figure is set to rise to 11.50% by 2027, highlighting the expanding crypto market in Kazakhstan. With the market on the rise, Coinbase and other crypto entities must align with regulatory requirements to tap into this burgeoning user base.