Kazakhstan approves legislation to Monitor Crypto Services
As part of the amendments introduced by the Kazakhstan Senate, it is intended to prevent the legalization of illicit funds, affecting companies that deal in digital assets. Under the new legislation, crypto service providers are subject to the country's financial monitoring system.
The Senate, Kazakhstan's upper house, has passed this legislation which is aimed at preventing the laundering of criminal proceeds and the financing of terrorism.
The amendments are aimed at improving the country's overall anti-money laundering framework, and some of them pertain to digital currency platforms.
A company that opens a cryptocurrency trading service in Kazakhstan must notify the Ministry of Digital Development, Innovation, and Aerospace Industry, which will conduct a risk assessment to ensure the company complies with AML requirements, as per the new legislation.
Senator Olga Perepechina asserts that Kazakhstan's present financial monitoring system does not include legal individuals who trade cryptocurrencies for cash, property, or other entities, or who own digital assets.
He adds that money laundering, terrorist-financed crimes, and the expansion of the black market, would only become more prominent in the country if the regulatory framework was not revised.
Furthermore, it is proposed to expand the powers of the Financial Monitoring Agency by giving it full access to the country's legal entity registration. This, according to Perepechina, is essential for ensuring transparency of legal ownership information.
Kazakhstan is a popular place to mine cryptocurrency since it is near to China, which has made it a popular place for Chinese miners fleeing China's recent crackdown on cryptocurrency mining.
As the crackdown on Bitcoin mining in China continues, the Central Asian nation, which maintains low electricity rates, became a hub for cryptocurrency miners.
Cryptocurrency miners are largely blamed for the country's electricity deficit, so policymakers are now trying to prevent energy problems during this winter.
Kazakhstan President Kassym-Jomart Tokayev said the expanding crypto sector needs immediate legal regulation and power supplies must be maintained.
CBW - External Analyst