Kazakhstan’s Ministry of Culture and Information recently blocked access to prominent cryptocurrency exchange Coinbase and selected online brokerage websites, including the New York Mercantile Exchange (NYMEX), local media reported on November 7.
The actions are based on Kazakhstan’s strict ‘Digital Assets Law’, a comprehensive piece of legislation that regulates the issuance and circulation of digital assets within the country.
The Digital Assets Law was introduced to create a structured regulatory environment for the cryptocurrency sector and to provide specific guidelines for the activities of online brokers.
The main objective is to ensure that cryptocurrency trading activities are aligned with established regulatory parameters to promote a safe and controlled environment for digital asset transactions.
Coinbase is not licensed
Under the new rules, the issuance and circulation of unbacked digital assets in the country is prohibited unless it takes place within the Astana International Financial Center (AIFC).
Any company that wants to offer services related to digital assets must obtain a license from the financial watchdog Astana. Binance and Bybit are two crypto exchanges that have obtained licenses to operate in the country in recent months.
According to the report, the government believes that Coinbase is in direct violation of regulations as it is not licensed to operate in the AIFC. The exchange’s website was subsequently blocked in accordance with the provisions of the Communications Law, which requires service providers to restrict access to websites with prohibited content.
Coinbase’s case represents a significant development within the cryptocurrency industry and highlights the importance of complying with local financial regulations.
As a major international cryptocurrency exchange, the restriction reflects Kazakhstan’s commitment to maintaining its laws and regulations in this rapidly evolving sector.
NYMEX unblocked after suspension
In addition to Coinbase, the government also blocked websites affiliated with Interactive Brokers and NYMEX. Interactive Brokers’ investigation stemmed from concerns about potentially fraudulent activity and financial pyramid schemes.
Meanwhile, NYMEX faced restrictions for offering futures trading in Bitcoin and Ethereum, activities that fell outside the jurisdiction of the International Financial Center. However, both companies’ websites were unblocked after the Financial Monitoring Agency made requests to restore them.
The recent regulatory measures in the country have sparked discussions and concerns within the financial community. Some experts have criticized the measures, suggesting they may be too broad or possibly incorrect.
As Kazakhstan continues to navigate its cryptocurrency and financial regulatory landscape, the impact of these measures on digital asset exchanges and brokers operating in the country remains a topic of ongoing interest and discussion.
