The publicly traded cryptocurrency exchange Coinbase can no longer offer its services to users in Kazakhstan. According to a local report, the Ministry of Culture and Information of the Republic of Kazakhstan confirmed that the Coinbase website has been inaccessible to local IP addresses.
Why Ban Coinbase?
Coinbase was accused of violating Kazakhstani law on digital assets. The law, which went into effect and was enacted in February 2023, mandates that the trading of digital currencies as well as crypto trading companies obtain a license from the Astana International Financial Center (AIFC), a financial centre in Astana Kazakhstan responsible for granting national licenses to operate.
Presently, crypto exchanges like Binance, Bybit, Upbit, Biteeu, ATAIX, and others have obtained licenses from the AIFC, making them eligible to operate freely within the country.
A Telegram media group, dubbed Finance.kz, confirmed that Coinbase’s plight trails back to September, adding that the Kraken crypto exchange was also affected by the Kazakhstani government’s decision. However, such bans are often bypassed through the use of virtual private networks (VPNs).
Other crypto-affiliated platforms that have been affected by similar blockage are financial companies Interactive Brokers and the New York Mercantile Exchange (NYMEX). However, the bans were lifted following requests from the Financial Monitoring Agency.
Kazakhstan’s Stance on Crypto
While the Kazakhstan government upholds a strict stance that crypto exchanges obey its law, the country emanates a friendlier outlook on cryptocurrencies. This is reflected in past decisions the country has made regarding digital currencies.
In 2019, the government declared that taxes would not be imposed on crypto-mining activities. The following year, the Kazakhstani government mentioned that it would invest $738 million in crypto mining in the next three years. The country’s 2022 first quarterly earnings report disclosed a $1.5 million revenue from crypto mining.
Last year, the country’s Ministry of Digital Development, Innovations, and Aerospace paved the way for licensed crypto exchanges to open bank accounts within selected banks across the country. The government has also explored the creation of a central bank digital currency (CBDC) in collaboration with the Binance-branded BNB Chain.
