Crypto Exchange Giant Coinbase Gets The Axe In Kazakhstan's Regulatory Crackdown

Kazakhstan’s authorities have confirmed the blocking of the website of Coinbase COIN, the world’s second-largest crypto exchange.

Kazakhstan Blocks Coinbase: The block is a direct response to the company’s operations, which are said to contradict the nation’s laws on digital assets, according to a Kursiv Media report.

This development comes as the digital asset sector continues to grapple with regulatory frameworks worldwide, a topic that will be addressed at the upcoming Benzinga's Future of Digital Assets conference on Nov. 14, where experts will discuss the implications of such regulatory actions and the future of cryptocurrency operations.

The Ministry of Culture and Information of Kazakhstan attributed the block to violations of the country's Digital Assets Law, specifically citing a clause that prohibits the issuance and circulation of unsecured digital assets and the operation of crypto exchanges dealing with such assets outside the Astana International Financial Center. 

The Ministry of Digital Development, Innovation, and Aerospace Industry requested the enforcement based on these provisions.

A Coinbase spokesperson told Benzinga: "As part of Coinbase's ambition to be the world’s most trusted and secure crypto platform, we strive to work collaboratively with policymakers and regulators. While this particular matter is still being investigated, the fundamentals remain: Coinbase is committed to compliance in all jurisdictions in which it operates." 

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Kazakhstan's Regulatory Landscape: Two other major financial websites, Interactive Brokers and the New York Mercantile Exchange, were also initially blocked.

These measures were put in place due to allegations of "financial pyramid and other fraudulent transactions" and unauthorized cryptocurrency futures trading, respectively.

These blocks were later lifted, which stirred discussions among financial experts.

The precise reasons for reinstating access to NYMEX were not detailed by the Kazakh government. 

The regulatory body in Kazakhstan provides avenues for Kazakh and foreign companies with limited resources to acquire a license to operate within the AIFC.

This process is designed to encourage fintech and regtech services, even allowing for some regulatory leeway as firms establish themselves.

The restrictions on Coinbase underscore a broader clampdown that has made several foreign brokers and crypto exchange sites inaccessible in Kazakhstan without a VPN.

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