Under new legislation passed by the upper house of the country's national parliament on Monday, crypto companies in Kazakhstan could soon be subject to anti-money laundering (AML) regulations, such as reported by local news outlet Vlast.
The new law extends the country's financial monitoring system to cover crypto service providers.
The new legislation would also establish a legal institution for public officials. When a company launches its cryptocurrency trading service or issues digital assets, it should notify the Ministry of Digital Development, Innovation and Aerospace Industry of Kazakhstan. The institution will be in charge of conducting a risk assessment, verifying that Know Your Customer and AML regulations are being followed.
According to Vlast, Senator Olga Perepechina stated that Kazakhstan's financial monitoring system does not currently cover legal entities that manage digital assets, organize trade or offer services for the conversion of cryptocurrencies into cash, tangible goods and other properties.
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, it warned.
However, the proposal has not yet been approved by the country's president, Kassym-Jomart Tokayev. Last month, Tokayev called for "swift" regulation of another cryptocurrency activity, Bitcoin (BTC) mining, highlighting the country's energy deficit. The Central Asian nation, which has some of the cheapest electricity in the world, has become a hotspot for Bitcoin mining amidst a intensification of Chinese repression.
As reported by Cointelegraph, within five years, Kazakhstan predicts that cryptocurrency mining will contribute at least $ 1.5 billion to its economy. The current mining hash rate of the country is second in the world after the United States.
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