Cryptocurrency exchanges Binance and Bybit made inroads into the Kazakhstan market when they became the first firms to receive formal consent from the Astana Financial Services Authority (AFSA) for full Digital Asset Trading Facility (DATF) licensing.
The AFSA is the regulatory authority for Kazakhstan’s Astana International Financial Centre (AIFC) special economic zone. A full license will permit the exchanges to provide investment services, advanced trading and custody. The exchanges have yet to receive the actual licenses.
Crypto exchanges thoroughly vetted in Kazakhstan
Both exchanges have been operating in Kazakhstan with “in-principle” authorization. Binance has had a presence in Kazakhstan since August 2022, when it received in-principle authorization to operate in the AIFC. It received a permanent license in October 2022, but the AFSA decided to restructure the DATF framework in January 2023, however.
After the passage of the Digital Assets Law in Kazakhstan in February 2023, the AFSA cracked down on unlicensed crypto exchanges in the country, resulting in the blockage of 980 exchanges, including Coinbase.
Bybit received in-principle approval from the AFSA in May 2023. Now both exchanges have undergone multiple compliance audits to become eligible for full regulatory licensing. Binance described the process in a statement:
“This included an External Financial Audit, obtaining ISO certifications for the organization’s IT systems, and multiple internal and external audits. Furthermore, AFSA conducted a rigorous evaluation of its own to ensure that Binance Kazakhstan met all applicable requirements and maintained top-notch systems and processes.”
There are no full DATF license holders yet.
Source: The Astana Times
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Kazakhstan is a center of crypto-mining activity
Kazakhstan is a top destination for crypto miners and received an influx of new miners after China cracked down on the activity in 2021. Miners in Kazakhstan have become a source of tax income for the government but have increasingly encountered issues with power consumption.
In October, leading miners in Kazakhstan sent an open letter to President Kassym-Jomart Tokayev complaining of prohibitively high electricity rates. Crypto miners in Kazakhstan pay less than half the rate charges on average in the United States, however.
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