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Licensed cryptocurrency exchanges want to operate in Kazakhstan

BAKU, Azerbaijan, August 13. Several cryptocurrency exchanges are finalizing preparations for work at the AIFC Astana International Financial Centre, Yagub Zamanov, director of the fintech division of the AFSA Astana Financial Services Authority, told Trend.

The AFSA licensed 6 AIFC companies to provide financial services for the management of the digital asset platform (crypto exchanges). Three of these companies have been licensed since March 2022.

Currently, most crypto exchanges are completing preparatory work related to the implementation of additional requirements and conditions established by a pilot project on “The Rules of Interaction between the AIFC Crypto Exchanges and Kazakhstan’s Second Tier Banks (STBs)”.

This includes, for example, building relationships with banks to integrate systems, as well as meeting regulatory capital requirements, ensuring retail investor protection requirements and cybersecurity requirements.

In general, the requirements of the AIFC pilot project on the interaction of Kazakh banks and crypto exchanges aim to ensure the sustainable development and functioning of the digital asset market, reduce risks and consist of equipping crypto exchanges with the following key measures ( but not limited to them):

– Preventing the use of crypto exchanges for money laundering and terrorist financing purposes. For these purposes, crypto exchanges must provide the following key control systems: the first is the “know your customer” procedure and the second is the “know your transaction” procedure. That is, crypto exchanges not only carry out the identification and proper verification of each client, but also check the client’s personal digital wallet and transaction history for signs of violation of the requirements of the legislation on combating the legalization (laundering) of the proceeds of crime and Terrorist Financing (AML/CFT).

– The guarantees of financial stability of crypto exchanges and minimum guarantees in relation to investors’ rights. The rules of the pilot project set requirements for the availability and maintenance of a regulatory minimum capital, which is primarily intended to cover losses in the event of the loss of digital assets, for example due to cyber attacks on the crypto exchange.

– Protection of the interests of retail investors. The pilot includes the following measures to ensure the protection of the interests of the most vulnerable category – retail investors: investment limits for retail investors of USD 1,000 per month (or a large amount if income is verified), testing (or Classification) of clients to obtain qualified/professional investor status, storage of digital assets in “cold wallets”.

– Additional investor protection measures. The regulatory environment of the AIFC ensures the protection of the interests of all categories of investors through the following measures: maintaining the adequacy of regulatory capital, disclosing the general risks of digital assets in general and for each digital asset separately, approving each type of digital assets by crypto exchanges and AFSA, before they can be traded on the crypto exchange platform.

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