Kazakhstan Approves Legislation to Monitor Cryptocurrency Transactions, Exchanges
Amid the current wave of regulations and crypto scrutiny, Kazakhstan’s senate has signed a law that imposes financial monitoring on cryptocurrency transactions and platforms. According to the new law passed by the country’s parliament on Monday, crypto businesses in Kazakhstan will be subjected to Anti-Money Laundering (AML) regulations.
Local news outlet Vlast, revealed that the new law would establish a legally-backed institution constituting public officials that will conduct a risk assessment and checkmate if a cryptocurrency firm adheres to AML regulations. Cryptocurrency firms that issue digital assets would have to notify the institution under the Ministry of Digital Development, Innovation, and Aerospace Industry.
Kazakhstan’s Financial Monitoring System Lacks Oversight to Curb Money Laundering
Senator Olga Perepechina disclosed that the current financial monitoring system in Kazakhstan doesn’t possess the power to handle cryptocurrency and monitor digital assets involving transactions. The senator added that it doesn’t cover legal entities to monitor crypto service offerings, and warned that the lack of oversight promotes money laundering and terrorist financing crimes.
Because of this lack of oversight, cybercriminals are encouraged to use digital assets in place of fiat for settlements. Thus, breeding crime.
Although the senate has approved the legislation, the country’s president Kassym-Jomart Tokayev, hasn’t approved it yet. In October, Tokayev joined the call for regulation of BTC mining, citing the decreased power supply as the driving force. BTC mining requires a lot of computing power, which might not be readily available at that particular time.
Tokayev stated that BTC mining is taking a toll on the country’s power deficit. Kazakhstan offers one of the most affordable electricities, and has become a hotspot for BTC since the Chinese crackdown on BTC miners in June.
Kazakhstan Expects Crypto Mining to Contribute Significantly to the Country’s Economy
In October, the Central Asian country reportedly predicted cryptocurrency mining to contribute to a significant amount of the nation’s economy in the next five years, according to a report from the country’s NABDC. The data stated that crypto mining is expected to bring about $1.5B in revenue, judging by the current figure generated from cryptocurrency mining.
At the moment, corporate digital cryptocurrency mining activities generate about $230 million per year. President of the NABDC Alan Dordzhiev, stated the figure is based on companies who are officially involved in mining. If gray miners are taken into account, this figure will be multiplied by 2.
Gray miners are those carrying out their crypto mining operations illegally. The president alongside other concerned stakeholders have also called for regulation of these gray mining operations to prevent electricity shortage, which consumes about 500 MW of electricity. Currently, the country has the BTC highest hash rate outside the United States, contributing to 18.10% of the world’s rate. The USA is pegged at 35.40%.
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