Kazakhstan Senate Adds New Legislation to Monitor Crypto and Improve AML

Kazakhstan Senate Adds New Legislation to Monitor Crypto and Improve AML

November 8, 2021

The Kazakhstan Senate has given its approval on various amendments to prohibit companies being able to legalise unlawful funds, such as cryptocurrencies. Consequently, this will have an influence on organisations working with digital assets. Therefore, the new regulations will ensure that any crypto service providers will be carefully monitored by the country’s regulatory body.

Additionally, new legislation is being amended to improve AML (anti-money laundering) prevention laws and combat financial terrorism. The introduction of the new laws concerns the establishment of a legal institute of ‘public officials’ and the financial auditing thereof. Overall, these changes will improve Kazakhstan’s AML framework and many concerns regarding cryptocurrency platforms.

This coincides as the Sputnik Kazakhstan report discloses “to regulate the operation of virtual asset providers.”

Crypto Platforms to Be Subjected to Financial Monitoring

Senator Olga Perepechina stated that individuals issuing digital assets, organising their trading and those providing crypto services for the crypto exchange, including exchanging crypto into cash, valuables and other possessions are, at this time, outside the sphere of the current financial monitoring system.

Perepechina explained that this situation can progress to an increase in money laundering crimes, terror financing, and growth of this shadowy economy. She warned that these criminals are advised to use digital assets and the electronic transfer of funds.

Additionally, she refreshed memories that the country had already adopted a new law regulating digital technologies in June 2021. The law enables the issuance and circulation of digital assets in the country and at the Astana International Financial Centre (AIFC). Further, the government intends to monitor all financial activities carried out by such entities as it moves forward.

Thus, the provisions made will compel these organisations to inform the regulatory body of their presence in this industry as they enter or close their businesses. It has been proposed that The Ministry of Digital Development, Aerospace and Defense Industry be this regulator. In addition to that, to expand the monitoring agency’s powers, another proposal has been suggested to give it unrestricted access to the country’s register of legal entities. Perepechina is convinced that this stage is paramount to verify the transparency of the official information about the legal ownership of business organizations.

The new law ‘On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Counteracting the Legalization (Laundering) of Criminally Obtained Incomes and Financing of Terrorism,’ after having passed through the Senate, now awaits the signature of the president of Kazakhstan, Kassym-Jomart Tokayev.

Concerns over Power Deficit Due to Bitcoin Mining

Recently, Tokayev has called for urgent regulation of an additional crypto activity, bitcoin mining. With the strict measures occurring in China, Kazakhstan has become an attractive option for bitcoin mining with its cheap rates of electricity. This has led to a seven percent increase in electricity consumption this year.

Amid the huge interest in crypto, authorities have set limits and imposed restrictions for non-profession investors. This limits the amount of cryptocurrency that they can invest in with domestic crypto exchanges legally registered with Nur-Sultan, the financial hub. A message from the regulators clarified that there is a need to protect private individuals from exposure to risks associated with digital assets.


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