Kazakhstan Senate Adopts Legislation Subjecting Crypto Platforms to Financial Monitoring

During a plenary session Senator Olga Perepechina pointed out that legal entities issuing digital assets, organizing and trading them, as well as those who provide services for the exchange of cryptocurrency into cash, valuables, or other property, are currently not covered by the financial monitoring system.

Perepechina says this encourages the growth of crime related to money laundering, terrorist financing, and the expansion of shadow economies. The deputy advised that terrorists and malefactors are encouraged to use electronic assets and digital means in their settlements.

Olga Perepechina reminded us that Kazakhstan passed a law to regulate digital technologies in June this year. It permits the circulation and issuing of digital assets within the country as well as at the Astana International Financial Centre ( AIFC). The lawmakers want to make financial monitoring of entities that engage in such activities.

These new provisions will require crypto companies to inform the relevant government agencies when they start or stop operations. The Ministry of Digital Development, Aerospace and Defense Industry will be the primary regulator.

Another suggestion is to give the Financial Monitoring Agency unrestricted access, in order to increase its powers. Perepechina believes that this is necessary in order to ensure transparency of information regarding legal ownership of business entities.

After the vote in Senate, the law “On Amendments and Additionals to Certain Legislative Acts of The Republic of Kazakhstan on Counteracting… Legalization (Laundering), of Criminally Obtained Incomes, and Financing of terrorism” was sent to Kassym Jomart Tokayev, the president of Kazakhstan. He must sign it.

Concerned about the power shortage in Kazakhstan, Tokayev recently called to discuss the ‘urgent regulation’ of bitcoin mining. The country in Central Asia has been a popular spot for coin minting due to its low electricity rates. This is despite the ongoing crackdown by China. The 7 percent increase in electricity consumption this past year has been blamed largely on cryptocurrency miners.

Authorities recently set limits for cryptocurrency investing. Non-professional investors cannot buy on local exchanges that are registered at the financial hub of Nur-Sultan. The restrictions were imposed by regulators to protect individuals from the risks associated with digital assets.