Kazakhstan Senate Approves Legislation Regulating Crypto Service Providers

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According to new legislation passed by the upper house of the country’s national parliament on Monday, crypto companies in Kazakhstan may soon be subject to anti-money laundering (AML) regulations, as local media Vlast reported.

The new law expands the country’s financial monitoring system to cover crypto service providers.

The new legislation would also establish a legal institution of public officials. When a company launches its cryptocurrency exchange service or issues digital assets, it should notify the Ministry of Digital Development, Innovation and Aerospace Industry of Kazakhstan. The institution will be responsible for carrying out a risk assessment, verifying that Know Your Customer and AML regulations are complied with.

According to Vlast, Senator Olga Perepechina said that Kazakhstan’s financial monitoring system currently does not cover legal entities that manage digital assets, organize exchanges or offer services for the conversion of cryptocurrencies into cash, tangible property and other goods.

The senator warned that this lack of oversight allows the rapid spread of money laundering and terrorist financing crimes, as well as the growth of the black market. Cybercriminals, including terrorists, are encouraged to use digital assets and electronic methods in their settlements, she warned.

Related: Kazakhstan Expects At Least $ 1.5 Billion In Crypto Mining Economic Activity Within 5 Years

However, the proposal has not yet been approved by the country’s president, Kassym-Jomart Tokayev. Last month, Tokayev called for the swift regulation of another cryptocurrency activity, Bitcoin mining (BTC), noting the country’s energy deficit. The Central Asian nation, which has the world’s cheapest electricity, has become a Bitcoin mining hotspot amid an intensified Chinese crackdown.

As Cointelegraph reported, within five years Kazakhstan predicts that cryptocurrency mining will contribute at least $ 1.5 billion to its economy. The country’s current mining hash rate is second in the world after the United States.

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