Digital Asset Exchange and AIFC legislation
The Digital Asset Exchange and its activities are accredited and regulated by AIFC legislation. As an accompaniment, second-tier banks set up an account for AIFC participants and the exchange. This is an important consideration because the Digital Asset Exchange is also required to warn potential buyers of the risks associated with dealing in unsecured digital assets.
In case of sale of digital assets, obtained as a result of digital mining on the territory of the Republic of Kazakhstan, such digital assets are subject to mandatory sale through digital asset exchanges which are licensed by the AIFC, in the amount of at least 75% (seventy-five percent) of the assets in accordance with the rules for submitting information on the income of digital miners and digital mining pools in for tax purposes. Digital asset exchanges are required to notify individuals and legal entities about the risks associated with the purchase, possession and execution of transactions with unsecured digital assets. The issuance and turnover of unsecured digital assets, as well as the activities of digital asset exchanges on unsecured digital assets, except on the territory of the AIFC, are prohibited on the territory of the Republic of Kazakhstan.
The AIFC is currently preparing interactions with crypto exchanges ATAIX Eurasia and Biteeu Eurasia. The AIFC has already provided 7 crypto-exchanges with the licenses and expects to increase the list of licensed entities.
As an example, Binance, which is licensed by the AIFC, has signed a memorandum dated 25th May 2022 on the assistance to the state authorities of the Republic of Kazakhstan in the tracing of illegal cryptocurrencies.
Thus, based on the above stated, we may conclude that Kazakhstan is striving for development of blockchain technologies and is willing to become an international hub for digital miners. We assume that the newly adopted regulations do not seek to stifle mining but, vice versa, to assist the digital mining in integrating and provide transparency for investors who are willing to develop the industry and make crypto assets eligible around the world.