Kazakhstan Authorities Confirm Official Block Of Coinbase
According to an official announcement by the Ministry of Culture and Information of the Republic of Kazakhstan, Coinbase’s website has been blocked in the country, citing violations of the country’s new digital asset law.
Author:Stefano MclaughlinReviewer:Camilo WoodFeb 04, 202411.4K Shares184K Views
According to an official announcement by the Ministry of Culture and Information of the Republic of Kazakhstan, Coinbase’s website has been blocked in the country, citing violations of the country’s new digital asset law.
In November 2023, a report from a local news outlet, Kursiv, revealed that an order from the Ministry of Culture and Information blocked access to the Coinbase website. This move follows previous reports of access difficulties to Coinbase from local IP addresses, which emerged earlier in September.
Overview
According to the report, the Ministry’s representatives emphasised that the request came from a different government body, the Ministry of Digital Development, which accused Coinbase of violating the Law of Digital Assets. Coinbase has been accused of violating the Law on Digital Assets passed in February 2023, which establishes strict regulations on the issuance and trading of digital currencies, as well as the operation of crypto exchanges.
Experts at Bitcoin Apexmentioned that under Clause 5 of Article 11 of the Law on Digital Assets, which prohibits the issuance and trading of digital currencies without a national licence, crypto exchanges such as Coinbase are required to obtain a national licence to operate legally within Kazakhstan. The authority to operate these licences is granted by the Astana International Financial Center (AIFC), a special economic zone in Kazakhstan.
Coinbase Implications for Crypto Users in Kazakhstan
Coinbase’s website blocking in Kazakhstan had immediate implications for the cryptocurrency exchange and its users in the country. With access denied, Kazakhstan residents could not trade or access their accounts on Coinbase, and the exchange itself faces obstacles in serving its users within the country. In recent years, Coinbase, like many cryptocurrency exchanges, has seen a surge in interest and usage, making it a popular choice for individuals looking to invest in digital assets.
According to the new regulatory measures, Kazakhstan aims to exert greater control over the crypto market, ensuring all players comply with the necessary legal licences. The move made by the government to block Coinbase aligns with its broader objectives of regulating the crypto industry and protecting consumers from potential risks associated with digital assets. By enforcing the Law on Digital Assets, Kazakhstan plans to create a safer and more transparent environment for crypto activities within its borders. Coinbase has not yet issued an official statement regarding the blocking of its services in Kazakhstan. It remains to be seen how Coinbase will respond to the regulatory actions taken by the authorities of Kazakhstan.
Other Crypto Blocks in Kazakhstan
The move by Kazakhstan to block foreign brokers and crypto exchanges was announced by the Telegram channel FINANCE.kz(now known as The Tenge website). The reports emphasised that most websites of foreign brokers and crypto exchanges were inaccessible in the country without the use of a VPN. International Brokers were still reported to be opening accounts for users in Kazakhstan. In Kazakhstan, the Astana International Financial Center (AIFC) grants both local and foreign companies with limited resources the opportunity to obtain a licence operation. The firms are then permitted to provide FinTech and RegTech services without immediate full compliance with all regulatory requirements.
An initial application outlining the project’s development concept must be submitted to the AIFC for a company to be registered. If approved, within two months, a complete application should follow for further review by the AIFC Financial Service Authority (AFSA), with authorisation granted on the FinTech Lab site once all prerequisites are met. The AFSA, which regulates the AIFC, has approved Binance, Bybit, ATAIX, Upbit, CaspianEx and Xignal&MT. Kazakhstan has taken a rigorous regulatory approach to crypto, including the crypto mining sector, which is among the largest in the world. In October 2023, eight major crypto-mining sectors in Kazakhstan expressed their concernsto President Kassym-Jomart Tokayev through an open letter claiming that the crypto-mining industry is facing challenges due to high energy prices for miners.
Future of Crypto in Kazakhstan
The recent move in Kazakhstan shows the ongoing global debate over how the government should regulate cryptos. While other countries are embracing cryptocurrencies and blockchain technology, others have opted for a more cautious approach by introducing stringent regulations or outright bans. Kazakhstan’s move to enforce the Law on Digital Assets falls within the latter category, as the government plans to strike a balance between fostering innovation and safeguarding its financial system. Kazakhstan’s move to block Coinbase shows how determined the government is to ensure its resident's safety in the volatile crypto space.
Despite the ongoing challenges, Coinbase announced that it has expanded its Global Advisory Council with four national security experts to assist the exchange in assessing the impact of regulatory uncertainty in the United States. The announcement revealed that the Global Advisory Council was set up in May 2023 as the third advisory council at Coinbase.
Stefano Mclaughlin
Author
Camilo Wood
Reviewer
Latest Articles
Popular Articles