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Kazakhstan is tightening its KYC and AML regulations for cryptocurrency exchanges to combat money laundering, terror financing, and other financial crimes.
Kazakhstan’s government is reportedly regulating the local cryptocurrency exchanges with an aim to prevent financial crimes. According to a legislative bill, businesses will have to provide comprehensive information about their day-to-day operations to the country’s financial regulatory bodies to prove that they have no links to money laundering schemes.
A parliamentary member, Olga Perepechin noted that these efforts will overcome the risk of financial crimes. He further highlighted that the crypto businesses are lacking financial monitoring regulation which makes the cryptocurrencies prone to money launderers.
“This leads to the spread of crimes in the field of money laundering and terrorism financing, including the shadow economy. It stimulates bad actors to use virtual assets in settlements.” as Olga Perepechin stated.
The country is famous among the cryptocurrency space as being one of the leaders in crypto mining. It accounts for 18.1% of the world’s hash rate, placing Kazakhstan in the second position after the USA. Shortly after China imposed restrictions on crypto mining, Kazakhstan became an undisputed leader, accountable for 35% of the global mining share.
As per CryptoPatato reports, the financial body of Kazakhstan has allowed the banking sector to render digital currency services to their clients. Additionally, the government has authorized financial institutions to open digital accounts for bitcoin and altcoin transactions.
An executive from the Data Century Industry (DCI), Sergey Putra, said, “The government’s initiatives have brought a step towards wider digital assets adoption in Kazakhstan”. He highlighted the value of the crypto industry, a market which Kazakhstan should not ignore.
Sergey Putra states, “It is billions of dollars in daily turnover around the world. And even if Kazakhstan takes some fraction of a percent, this is serious money that will come to Kazakhstan in the form of investments. It will remain here in the form of taxes, in the form of jobs, and salaries. This is a very large industry, which Kazakhstan still bypasses.”
The scheme will last for 12 months, after which the government will decide whether to extend the deadline or not.
Suggested read: Bank of Spain Issues New Cryptocurrency Regulations