Local news agency Vlast reports that according to a new law passed by the upper house of parliament on Monday, crypto companies in Kazakhstan may soon be subject to anti-money laundering (AML) rules.
The new law extends the country’s financial monitoring system to cryptocurrency service providers.
The new legislation will also establish the legal institution for civil servants. When a cryptocurrency trading service company launches or issues digital assets, it must notify the Ministry of Digital Development, Innovation and Space of Kazakhstan. The institution will be responsible for carrying out a risk assessment to ensure that KYC and AML are being followed.
According to Vlast, Senator Olga Perepechina said that the financial control system in Kazakhstan does not currently cover legal entities that work with digital assets, regulate trade or provide services for converting cryptocurrency into cash, tangible goods and other real estate.
The senator warned that the absence of oversight contributes to the rapid spread of money laundering and terrorist financing, as well as the growth of the black market. It warned that cybercriminals, including terrorists, are encouraged to use digital assets and electronic methods in their settlements.
On the topic: Kazakhstan expects at least $1.5 billion in economic activity from cryptocurrency mining over 5 years.
However, this proposal was not approved by President Kassym-Jomart Tokayev. Last month, Tokayev called for the “early” regulation of another cryptocurrency activity, Bitcoin (BTC) mining, citing the country’s power shortage. The Central Asian country, which has one of the cheapest types of electricity in the world, has emerged as a bitcoin mining hotspot amid increasing attacks from China.
Over the next five years, Kazakhstan expects cryptocurrency mining to contribute at least $1.5 billion to the economy, Cointelegraph reports. The country’s current mining hash rate is second in the world after the United States.