AIFC Crypto Exchange Project Eases Investment, Says Project Participant

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ASTANA A year ago, a pilot project was launched to forge interaction between second-tier Kazakh banks and crypto exchanges registered with the Astana Financial Services Authority (AFSA) of the Astana International Financial Center (AIFC). The Astana Times spoke with Talgat Dossanov, Managing Director of Biteeu Eurasia, one of the participants in the project, about the interim results.

Talgat Dossanov, Managing Director of Biteeu Eurasia, one of the project participants, about the intermediate results. Photo credit: The Astana Times.

The aim of the project is to provide crypto exchanges with access to the Kazakhstan market and allow residents and crypto miners of Kazakhstan to trade on AIFC crypto exchange platforms, create favorable conditions to investments through the fiduciary channels provided by second-tier banks of Kazakhstan, and to amend the national legislation of Kazakhstan and acts of the AIFC based on the results of the pilot projects.

AFSA is the only institution in Kazakhstan authorized to regulate any activity involving the use of digital assets. The AFSA was established as an independent regulatory body from the AIFC to oversee the licensing, registration and supervision of financial and market institutions, as well as the regulation of financial services and related activities within the AIFC.

Founded in 2022 in Kazakhstan, Biteeu Eurasia is the only exchange in the world to use space technologies to back up customer data via satellite. The company also has a presence in Australia and Estonia as an officially licensed digital asset exchange.

According to Dossanov, the company was the first to issue a crypto-fiat transaction as one of the first exchanges to integrate with a second-tier bank. This allowed Biteeu Eurasia customers to trade and acquire tenge cryptocurrencies.

We are currently negotiating to create new products with regulators, including National Bank and our regulator, AFSA. With a new crypto-fiat product, we hope to satisfy the Kazakh people and our customers soon, he said.

Comparing his experience in Kazakhstan to that of Australia and Estonia, Dossanov said communication with the regulator was the main difference. He emphasized AFSA’s customer-centric approach, saying nowhere else have we had the chance to speak with the regulator daily by phone or email.

With confidence I can say that AFSA, as a regulator, values ​​its customers. It’s a huge advantage. Because the country supports this industry, the regulator takes all possible measures to ensure the growth of this pilot. Thanks to this, Kazakhstan was the first country in the region to develop in this direction, Dossanov said.

He said communication is more difficult in the European and Australian markets.

You have to write letters there. It may take a month or two to get a response while in Kazakhstan it’s almost in online mode, he said.

Dossanov addressed the opportunities the pilot project presents for citizens of the country, increasing their participation in AIFC crypto exchanges. According to him, this reflects the Kazakh government’s commitment to promoting the crypto industry.

This is a major government effort to make Kazakhstan the first nation in the region to develop the crypto industry, and it worked, we are the first. I consider it a bit of an honor for us to be one of the exchanges to revive the cryptocurrency market in Kazakhstan. Together with the country’s regulator and crypto community, we hope Kazakhstan will be at the forefront of the global crypto industry, Dossanov said.

It nearly happened when Kazakhstan rose to the world’s second spot for Bitcoin mining two years ago due to a combination of circumstances. However, the Kazakh energy system has gone from a surplus to a deficit due to the mining industry absorbing more than 7% of the country’s total generating capacity by the end of 2021. Shortly after, the authorities completely disconnected miners, mainly black or gray miners, from the national grid, ending the boom.

According to Dossanov, this was mainly due to the lack of regulation of the crypto mining industry and the pressure on the country’s energy capacities.

As a crypto-exchange, we operate within the legal framework of the AIFC. Our regulator has specific rules that we must follow. So there can be no shock in the market, no one should close and consumers won’t lose money if an exchange closes since we have specific commitments to the regulator. We are subject to continuous audits and verification of client funds to ensure that our clients’ assets are secure, he said.

Dossanov noted that the government is aware of the challenges posed by the lack of regulation and, in collaboration with the Ministry of Digital Development, Innovation and Aerospace Industry and the AIFC, he recently drafted a law regulating the digital assets.

It fully regulates both mining and the operation of crypto exchanges, as well as the distribution of digital assets. As a result, it secures the entire market, establishing a legal framework where consumers can buy cryptocurrencies safely and legally, he said.

Still, Dossanov believes a lot of work is needed, as the Kazakh market is still in its infancy.

Kazakhstan has only had a legal cryptocurrency industry for a year. Many events have been organized this year, and a lot of work has been done. This is just the beginning, he says.

Dossanov advised potential crypto exchange participants to exercise extreme caution when investing their money, as many illicit actors, including financial pyramids, are offering to buy cryptocurrency.

It is essential to select the right crypto exchange and the right broker, because there are currently many illegal players in the market, they are crypto exchangers, there are many scams, where financial pyramids offer the purchase of crypto -currency, promising incredible profits in the future. Caution should be exercised in this day of information noise and the desire to generate a quick buck. People should have a basic understanding of finance. Trade on approved exchanges, or you risk losing your money instantly, he said.

Dossanov expects cryptocurrency to be integrated into everyone’s daily life and to become an additional means of payment in the future.

I wish more businesses would join crypto initiatives so that individuals can not only buy cryptocurrency, but also use it while shopping or dining out. To integrate it into our daily life as an additional means of payment rather than a substitute or alternative to traditional currency, Dossanov concluded.

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