JAKARTA - Several cryptocurrency exchanges continue to accept Russian citizens despite the latest Western sanctions against the country. But this is not without certain boundaries.
In late September, Kazakh President Kassym-Jomart Tokayev witnessed the purchase of the first fiat-to-crypto regulated by local commercial bank, Eurasian Bank.
The transaction involves a local crypto exchange called Intebix, which allows retail clients to purchase cryptocurrencies with local currency, tenge Kazakhstan (KZT).
Intebix is not limited to Kazakh citizens, and this crypto exchange is also willing to serve foreigners who come to the country. Intebix founder and CEO Talgat Dossanonov stressed that Intebix crypto transactions can only be accessed by cardholders from one of the banks in Kazakhstan.
"Although foreign nationals are more than accepted on Intebix, they will need local bank cards to enjoy crypto-to-fiat transactions," Dossanonov said in an interview with Cointelegraph.
Dossanov noted that Intebix supports crypto transactions only for verified clients, while local banks are carefully examining each potential client whether they are sanctioned.
Russian citizens who are not on the sanctions list, are also accepted in Intebix, although they have to go through deep compliance checks and open accounts at local banks to enjoy crypto-to-fiat transactions, said Dossnaov.
Kazakhstan is one of the main goals for Russian citizens who are trying to avoid mandatory military to fight in Ukraine after Russian President Vladimir Putin announced partial mobilization in mid-September. About 200,000 Russians fled mobilization and reportedly entered Kazakhstan on October 6.
Major banks in Kazakhstan, including the Halyk Bank, have reportedly suspended the use of Russia's payment system, Mir amid a sanctions warning by the United States Treasury.
Apart from boycotting Mir, several Kazakhstan banks have also stopped accepting payments from local Russian banks such as Sberbank, which caused them to sell their local businesses.
Despite welcoming foreigners, crypto exchange Intebix is still committed to complying with sanctions from the European Union.
"Because we are a regulated exchange, we must comply with the requirements set by our regulators. We continue to monitor the current situation to ensure we operate within the regulatory framework," said Dossanonov.
The Intebix CEO stressed that Intebix does not restrict all Russian nationals on its platform because the company is regulated by the Astana International Financial Center (AIFC). On the other hand, Biteeu, the European Intebix branch, no longer carries Russia according to sanctions from the European Union.
Dossanov founded Biteeu in 2019 with Kazakh entrepreneur Shukhrat Ibragimov, son of local oligarch Alijan Ibragimov. One of the founders of Biteeu, Ibragimov, has been a member of the Eurasian bank board since 2017.
He also became board manager at the local mining giant and raw material supplier Eurasia Resources Group (ERG) after his father, the main shareholder and co-founder of ERG, died in February 2021.
According to Dossanonov, Ibragimov is the only investor in Biteeu and Intebix. The reason why Eurasia Bank is the first crypto-friendly bank in the region is largely because of Ibragimov. He believes in crypto and sees new opportunities," the executive said.
Kazakhstan has emerged as one of the largest crypto mining centers in the world. The country has actively adopted policies to promote crypto adoption, officially allowing crypto exchanges to open bank accounts in June 2022.
Binance, one of the world's largest crypto exchanges, received principle approval to operate as a digital trading facility and provide storage services at AIFC in August. On October 19, Binance reportedly appointed Zhaslan Madiyev, a former deputy minister at the Ministry of Digital Development, as director of Binance Kazakhstan.
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