The Ministry of Culture and Information of the Republic of Kazakhstan has confirmed the blocking of Coinbase, underscoring the country’s stringent regulatory stance on the crypto sector.
Kazakhstan, renowned for its thriving cryptocurrency mining industry, has recently made headlines due to its government’s efforts to restrict access to prominent cryptocurrency platforms.
The Ministry of Culture and Information officially acknowledged the restriction placed on the Coinbase website.
Significantly, the ban was imposed in response to concerns that Coinbase was in violation of Kazakhstan’s Law on Digital Assets, enacted in February 2023.
This law explicitly prohibits the issuance and trading of digital currencies and cryptocurrency exchange operations without obtaining a national license.
The Astana International Financial Centre (AIFC), a special economic zone in Kazakhstan, is responsible for granting these national licenses.
Several platforms, including Binance, Bybit, CaspianEx, Biteeu, ATAIX, Upbit, and Xignal&MT, have successfully acquired these licenses, enabling them to operate within Kazakhstan.
Coinbase’s situation is not unique in facing these restrictions.
The Ministry of Culture and Information provided an explanation for the blocking of Interactive Brokers and the New York Mercantile Exchange (NYMEX) websites.
These actions were taken due to identified violations in their activities, particularly in trading cryptocurrencies, which contravenes Kazakhstan’s legal framework.
The Ministry of Information disclosed that Interactive Brokers had been included in the Cybernadzor system database by the Agency for Regulation and Development of the Financial Market (ARFRD).
The agency cited signs of a “financial pyramid and other fraudulent transactions” within the company’s operations.
The NYMEX website was reportedly blocked for permitting the trading of cryptocurrency futures outside the jurisdiction of the AIFC without securing a work permit from the Astana Financial Services Regulatory Committee (AFSA).
Interestingly, the websites of Interactive Brokers and NYMEX were subsequently unblocked after requests from the Financial Monitoring Agency, although the reasons for this reversal were not disclosed.
These actions have not gone unnoticed, prompting concerns from local and foreign companies operating in Kazakhstan, with some regarding the website blocks as a mistake.
Financial analyst Andrey Chebotarev emphasised that foreign brokers and cryptocurrency exchanges had become virtually inaccessible from Kazakhstan, resulting in challenges for local investors.