This year, the Financial Monitoring Agency of Kazakhstan (AFM) has taken significant steps to regulate the burgeoning cryptocurrency market within its borders. The agency has effectively blocked access to nearly one thousand crypto exchanges that were operating without proper registration.
Nearly a Thousand Platforms Blocked for Non-Compliance
A recent press release from the government, dated December 7, highlighted the AFM’s actions against unlicensed platforms. According to this announcement, the agency blocked access to 980 illegal crypto exchanges in 2023. Alongside this, nine investigations were initiated focusing on “illegal exchange operations” and money laundering.
Digital Assets Law Enforces Strict Regulations
The crackdown follows the implementation of the Digital Assets Law, which came into effect in February 2023. This law prohibits the creation and trading of digital currencies and cryptocurrency exchange activities unless a national license is obtained. The Astana International Financial Center (AIFC), a special economic zone in Kazakhstan, is the key authority responsible for granting these necessary approvals.
Major International Platforms Affected
The list of exchanges blocked includes some globally recognized names. For instance, in November, it was reported that Kazakhstan’s citizens could not access the Coinbase website, following a blockage order issued by the Ministry of Culture and Information. The ministry clarified that the directive originated from the Ministry of Digital Development, citing violations of the Law on Digital Assets.
A Select Few Approved to Operate
Despite the widespread crackdown, a handful of exchanges have received approval to operate within Kazakhstan. These include notable platforms like Binance, Bybit, CaspianEx, Biteeu, ATAIX, Upbit, and Xignal&MT, showcasing the country’s selective yet open approach to digital asset trading under strict regulatory compliance.
Conclusion: Balancing Regulation and Innovation
The decisive actions taken by Kazakhstan’s Financial Monitoring Agency in 2023 underscore the country’s commitment to establishing a regulated and secure cryptocurrency market. By blocking 980 unlicensed crypto exchanges and launching investigations into illegal activities, the AFM is setting a clear precedent for compliance with the Digital Assets Law.
This approach not only aims to protect consumers and prevent money laundering but also fosters a more stable and reliable environment for digital currency trading. The approval of select exchanges like Binance and Bybit indicates Kazakhstan’s willingness to embrace digital innovation, provided it aligns with the country’s regulatory framework.
As the digital assets landscape continues to evolve, Kazakhstan’s measures may serve as a model for other nations grappling with the challenges of regulating this dynamic and rapidly expanding sector. The balance between stringent regulation and the nurturing of technological advancement will be crucial for the future growth and legitimacy of the cryptocurrency market, both in Kazakhstan and globally.
