Kazakhstan has passed a new law that seeks to regulate cryptocurrency service providers. The new law puts the burgeoning industry under the Digital Development Ministry and requires all service providers to conduct anti-money laundering checks. The new law was passed by the upper house of the Kazakh parliament, local outlet Vlast reports. According to Olga Perepechina, one of the senators pushing for the bill, virtual asset service providers (VASPs) in Kazakhstan have remained unregulated for long enough.
Regulators express concern over criminals using cryptocurrency.
Olga Perepechina believes that the lack of oversight has provided fertile ground for criminals to exploit. She said, “Today, persons issuing and organizing trading of cryptocurrencies, as well as providing services for the exchange of digital assets for cash, valuables and other property, are outside financial monitoring, which contributes to the spread of crimes in the field of money laundering and terrorist financing, including the shadow economy.” “It stimulates malefactors, including terrorists, to use electronic assets in mutual settlements,” she added.
AML and CFT regulations will be key areas of focus.
The Ministry of Digital Development, Innovation, and Aerospace Industry will be given oversight authority over the VASPs. It will ensure that all the AML and CFT regulations are met and conduct a risk assessment of all the VASPs before they are allowed to serve the Kazakh public. The new law also extended to other financial services, calling for the reduction of the threshold at which financial entities are required to report a transaction from 3 million tenge ($6,990) to 1 million tenge ($2,330). It will also see those close to public officials, including their family members come under more scrutiny. The bill is at the desk of the country’s president, Kassym-Jomart Tokayev, for his signature before it becomes official law.