In recent developments, Kazakhstan’s Ministry of Culture and Information recently announced the blocking of several prominent financial websites in the country, including Coinbase, Interactive Brokers, and the New York Commodity Exchange (NYMEX).
The move comes in response to alleged violations of Kazakhstan’s digital assets legislation and “identified fraudulent activities.”
Access To Coinbase Restricted In Kazakhstan
According to local media reports, the Ministry of Culture and Information stated that the blocking of Coinbase was due to the exchange’s cryptocurrency trading activities, which contradicts paragraph 5 of Article 11 of Kazakhstan’s Law on Digital Assets.
Allegedly, the Ministry of Culture received a request from the Ministry of Digital Development, Innovation, and Aerospace Industry to block access to Coinbase, as the exchange’s operations were deemed “non-compliant” with the country’s regulations.
The blocking of Coinbase was carried out under the provisions of the Communications Act, which obliges internet service providers to restrict access to sites hosting prohibited information.
In addition to Coinbase, the websites of Interactive Brokers and NYMEX were also blocked. The Ministry of Information explained that Interactive Brokers was added to the “Cyber Supervision” system database by the Agency for Regulation and Development of the Financial Market (ARRFR) due to suspected involvement in financial pyramid schemes and other fraudulent operations.
As for NYMEX, the exchange allows trading futures on Bitcoin (BTC) and Ethereum (ETH) outside the jurisdiction of Kazakhstan’s International Financial Center “Astana” (AIFC). The Ministry of Information cited violations of communication laws as the reason for blocking these sites.
However, following public outcry and pressure from financial experts, access to Interactive Brokers and NYMEX was restored.
The Information Committee received a letter from the Financial Monitoring Agency requesting the resumption of access to Interactive Brokers, and based on this letter, an order was issued to restore access to the website. The reasons for restoring access to NYMEX were not explicitly explained.
Regulatory Confusion?
Per the report, The AIFC is the only territory in Kazakhstan where the trading of “unsecured digital assets” is permitted. Several cryptocurrency exchanges, including Binance, CaspianEx, Biteeu, ATAIX, Upbit, Xignal & MT, and Bybit, have obtained operating licenses within Kazakhstan.
However, a work permit for the AIFC is issued by the Astana Financial Services Regulatory Committee (AFSA), and it appears that NYMEX does not possess such authorization.
The blocking of foreign brokers and cryptocurrency exchanges in Kazakhstan has raised concerns among financial analysts. Some believe the blocking was a technical error, as certain internet protocol (IP) addresses were “inadvertently” included in the range of resources to be blocked.
Interactive Brokers is an American brokerage firm known for operating one of the largest electronic trading platforms in the United States. It is regulated by various financial authorities, including the US Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE).
The company serves many institutional and individual clients and provides access to a wide range of financial instruments, including cryptocurrencies.
All around, the recent blocking of Coinbase, Interactive Brokers, and NYMEX highlights the challenges and complexities surrounding the regulation of digital assets in Kazakhstan.
As the country continues to navigate this evolving landscape, further clarity and dialogue between regulatory bodies, financial institutions, and industry participants will be essential in ensuring a balanced and secure environment for cryptocurrency trading and investment.
The stock of the exchange, trading under the ticker symbol COIN, has experienced a significant upward trend since October 27. During this period, it rose from $71 to reach $86.
Featured image from Shutterstock, chart from TradingView.com