Binance provided insights into the details of operating within Kazakhstan

The Government of Kazakhstan continues to actively develop a legislative framework for crypto assets, aiming to effectively regulate this sector and safeguard the interests of its participants.

As of now, licensed exchanges can operate only within the Astana International Financial Center (AIFC). The issuance and trading of such assets in other regions of the country are prohibited.

In June 2022, a pilot project was initiated, enabling some crypto exchanges and second-tier banks to collaborate, thereby facilitating the opening of bank accounts for exchanges, a task previously impossible. Following the pilot project, the AIFC established a regulatory framework to ensure the smooth operation of crypto exchanges and banks, as well as facilitating their cooperation. This framework is also applicable to brokers, consultants, and other providers of digital asset services.

Consequently, under the new regulations, exchanges and other market participants are permitted to collaborate with any commercial bank in the country.

Moreover, the national legislation titled “On Digital Assets in Kazakhstan” was enacted, coming into force on April 1, 2023. This law laid down general guidelines for the circulation of digital assets in the country. Laws governing the operation of crypto exchanges within the AIFC became effective on January 1, 2024.

The AIFC Financial Regulation Committee is responsible for issuing licences to crypto exchanges and other market participants, including brokers and consultants. Presently, 8 crypto exchanges have been granted licences to operate in the country. Among them is Binance, which was one of the earliest recipients of such licensure. In 2023, the company launched a local crypto asset platform.

Work features of the local crypto exchanges

Regulation plays a key role in shaping the crypto market in Kazakhstan. But despite the positive changes, there are a number of limitations.

For instance, Binance Kazakhstan does not provide access to key products like P2P trading, Binance Earn, and futures trading. However, crypto transfers via Binance Pay and spot trading are available on the local platform. Binance is actively negotiating with the regulator to broaden the range of products accessible to clients in the country.

The AIFC also defines the list of cryptocurrencies permitted for trading on licensed exchanges. Presently, Binance’s local platform offers over 100 assets. The selection process for cryptocurrencies is stringent, involving thorough analysis including factors such as the asset’s recognition in other jurisdictions, liquidity, transparency, volatility, and other relevant parameters. Additionally, the AIFC retains the authority to instruct crypto exchanges to halt trading of certain assets if deemed necessary.

Security and stability issues

Amid increasing concerns among investors regarding frequent cases of money laundering and fraudulent activities on crypto exchanges worldwide, the AIFC is taking proactive measures to ensure stability and security within the digital assets sphere.

Under the AIFC’s regulations, all providers within the country are required to appoint staff members specifically tasked with combating money laundering.

Moreover, stringent rules have been implemented, necessitating comprehensive customer verification and rigorous assessments of the potential risks associated with money laundering or financing of terrorism. Service providers must also possess technological capabilities to identify clients.

Additionally, crypto exchanges are now obligated to furnish detailed information regarding the risks inherent in digital assets on their platforms. For investors intending to trade crypto derivatives, exchanges are required to conduct thorough assessments to verify clients’ compliance. This process includes evaluating clients’ knowledge, preparedness for potential risks and losses, as well as considering their qualifications and educational background.

Binance’s training programs

Binance Kazakhstan continues to actively develop educational and innovative projects focused on cultivating expertise in blockchain technologies and enhancing security in the digital sphere.

The company has initiated several educational programs aimed at enhancing awareness and proficiency in blockchain compliance and engineering. Since September 2023, this specialised education has been integrated into the curriculum of 22 universities. Binance anticipates that by 2026, approximately 40 thousand students will receive additional education in this field thanks to this program.

Furthermore, Binance is providing training to law enforcement personnel in Kazakhstan, focusing on data analysis within the blockchain sphere, identification of suspicious activities, and monitoring financial transactions. Over 250 specialists have already undergone this training.

Previously, Binance has conducted seminars to combat illicit activities in the digital sphere. These trainings have garnered positive feedback from law enforcement agencies across various countries, including Australia, Hong Kong, South Korea, Ukraine, and many others.