Kazakhstan Joins New Crypto Regulations To Reduce Tax Fraud

The President of Kazakhstan, Kassym-Jomart Tokayev, signed a new crypto rule. (photo: twitter @TokayevKZ)

JAKARTA - Kazakhstan, one of the world's largest Bitcoin mining centers, announced plans to introduce new crypto regulations to reduce tax fraud and unlawful business operations.

A new law signed by Kazakh President Kassym-Jomart Tokayev on February 6 returns the state's stance on mining operations that violate the law and the issuance of crypto assets. Of the two different laws, the first requires the issuer of digital assets that are secured to have government permits.

In addition, the publisher will be subject to monitoring by existing state laws regarding the Determination of Legalization (Laundering) Results of Crime and Terrorism Financing. The law will take effect from April 1, 2023.

The second law targets unsecured digital assets, usually obtained through crypto mining operations. To reduce the possibility of tax evasion, crypto miners in Kazakhstan will be forced to sell at least 75% of their income through listed crypto exchanges.

This rule, which aims to raise information about digital miners' income and digital mining pools for tax purposes, will be effective from January 1, 2024, to January 1, 2025.

All crypto mining licenses in Kazakhstan are issued for a limited period of three years and are different based on whether miners have mining facilities or not.

Simultaneously by introducing the above law, Kazakhstan launched a pilot of the central bank digital currency (CBDC) project digital tenge.

In a jointly published report by the National Bank of Kazakhstan (NBK) and crypto exchange Binance, NBK deputy governor Berik Sholpnyapov wrote about the bank's vision of collaboration between traditional finance and DeFi.

"In Kazakhstan, we have also started a practical R&D project to explore how our Digital Tenge CBDC can bridge the crypto world with traditional fiat payment infrastructure," Sholplukapov said, quoted by Cointelegraph.

Previously, in October 2022, the Astana Finance Services Authority of Kazakhstan granted Binance a permanent license to manage digital asset platforms and provide custodial services.