Kazakhstan’s financial monitoring system will now target cryptocurrency businesses.
New legislation passed by the Kazakhstan Senate means businesses that deal with digital assets as well as crypto trading services must adhere to anti-money laundering (AML) regulations.
According to the legislation, the Ministry of Digital Development, Innovation, and Aerospace Industry must be notified by a company that launches a cryptocurrency trading service, where a risk assessment will be taken to ensure the company is complying with AML regulations.
Senator Olga Perepechina said Kazakhstan’s current financial monitoring system does not cover legal individuals trading cryptocurrency into cash, property, and other entities as well as possessing digital assets.
Perepechina insisted the updated regulation framework was required as money laundering, terrorist-financed crimes and the growth of the black market would only become more prevalent in the country without the necessary regulation.
Kazakhstan’s crypto mining
The crackdown on Bitcoin mining in China meant many miners flocked to central Asia, including Kazakhstan, which enjoys some of the world’s cheapest electricity.
The mass migration of miners propelled Kazakhstan to second in crypto production with 18.1 percent of the global market share, according to the Cambridge Centre for Alternative Finance (CCAF).
The increased income generated from Bitcoin mining saw Kazakhstan president Kassym-Jomart Tokayev sign a law to introduce an additional charge of 1 tenge (US$0.0023) per kilowatt-hour for miners which begins on January 1 2022.
Tokayev called on the regulation of crypto mining due to an electricity deficit and said a need to maintain a power supply was urgent in order to prevent energy problems in winter.