Coinbase Faces Kazakhstan Blockade Over Digital Assets Laws
Kazakhstan authorities have reportedly, blocked citizens from accessing the website of the Coinbase crypto exchange.
Since the beginning of 2023, governments worldwide have focused on licensing crypto service providers. This is being done to bring crypto under specific jurisdiction and tackle illicit activities such as money laundering and terror financing.
Also, after the FTX collapse, there is more stress on protecting the consumer from fraud.
Coinbase Violated Kazakhstan’s Law on Digital Assets: Reports
According to the Kazakhstan-based publication Kursiv, the Ministry of Information has blocked citizens’ access to the official website of Coinbase. This is because, according to the Ministry, Coinbase violated Kazakhstan’s laws on digital assets. It explained:
“Clause 5 of Article 11 of the Law on ‘Digital Assets’ states that the issue and circulation of unsecured digital assets, as well as the activities of crypto exchanges for such assets, are prohibited in Kazakhstan, with the exception of the territory of the Astana International Financial Center (AIFC).”
Companies need an AIFC license from the Astana Financial Service Regulatory Commission (AFSA) to operate in the country. In fact, in June 2023, AFSA granted permission to Binance to launch a regulated crypto exchange.
In Kazakhstan, companies must first submit a preliminary application to register themselves. After its approval, they must submit a complete application within two months.
If the conditions are met, AFSA will first grant an in-principle approval and then proceed with the complete application process. Binance got its in-principle approval in August 2022.
7.61% Crypto Penetration Rate
In 2023, there are approximately 1.48 million crypto users in Kazakhstan. The screenshot below shows that the crypto has a penetration rate of 7.61% in the Central Asian country. And it is expected to grow to 11.50% by 2027.
Hence, to capture this growing market, Coinbase needs to comply with the regulations. BeInCrypto has contacted Coinbase for a comment.
Read more: Coinbase Review 2023: The Best Crypto Exchange for Beginners?