Kazakhstan Officials Impede Crypto Exchange Coinbase, Citing Breach of Financial Legislation
Coinbase, the publicly traded cryptocurrency exchange, is no longer able to provide its services to users in Kazakhstan. The Ministry of Culture and Information of the Republic of Kazakhstan has confirmed that the Coinbase website is inaccessible to local IP addresses, citing a violation of Kazakhstani law on digital assets.
The law, which came into effect in February 2023, requires digital currency trading and crypto trading companies to obtain a license from the Astana International Financial Center (AIFC), the body responsible for granting national licenses to operate in Astana, Kazakhstan’s financial center. Several crypto exchanges, including Binance, Bybit, Upbit, Biteeu, ATAIX, and others, have already obtained licenses from the AIFC, allowing them to operate freely in the country.
Coinbase’s troubles in Kazakhstan have been ongoing since September, according to the Telegram media group Finance.kz. The Kazakhstani government’s decision also affected the Kraken crypto exchange. However, these bans can often be circumvented through the use of virtual private networks (VPNs).
Other financial companies, such as Interactive Brokers and the New York Mercantile Exchange (NYMEX), have also faced similar blockages, but these bans were lifted after requests from the Financial Monitoring Agency.
While Kazakhstan maintains strict regulations for crypto exchanges, the country has shown a favorable attitude towards cryptocurrencies. In 2019, the government announced that crypto-mining activities would not be subject to taxes. The following year, the Kazakhstani government pledged to invest $738 million in crypto mining over the next three years. The country’s first quarterly earnings report for 2022 revealed a revenue of $1.5 million from crypto mining.
In addition, the Ministry of Digital Development, Innovations, and Aerospace in Kazakhstan has allowed licensed crypto exchanges to open bank accounts in selected banks across the country. The government has also been exploring the possibility of creating a central bank digital currency (CBDC) in collaboration with Binance’s BNB Chain.
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