The Kazakh Senate approves a law regulating crypto service providers

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According to a new law passed by the upper house of the country’s national parliament on Monday, crypto companies in Kazakhstan could soon be subject to anti-money laundering (AML) regulations, local news agency Vlast reported.

The new law expands the country’s financial surveillance system to include crypto service providers.

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The new legislation would also create a legal body of public officials. When a company launches its cryptocurrency trading service or issues digital assets, it must notify the Kazakh Ministry of Digital Development, Innovation and Aerospace Industry. The institute is responsible for conducting a risk assessment to ensure that the Know Your Customer and AML regulations are being followed.

According to Vlast, Senator Olga Perepechina stated that Kazakhstan’s financial surveillance system does not currently cover legal entities that handle digital assets, organize trade, or provide services for converting cryptocurrencies into cash, tangible goods and other property.

The Senator warned that this lack of oversight is allowing money laundering and terrorist financing crime to spread rapidly, as well as the growth of the black market. Cyber ​​criminals, including terrorists, are encouraged to use digital assets and electronic methods in their settlements, she warned.

Related: Kazakhstan expects at least $ 1.5 billion of economic activity from crypto mining in 5 years

However, the proposal has not yet been approved by the country’s president, Kassym-Jomart Tokayev. Last month, Tokayev called for the “rapid” regulation of another cryptocurrency activity, Bitcoin (BTC) mining, citing the country’s power deficit. The Central Asian nation, which has the cheapest electricity in the world, has become a bitcoin mining hotspot amid intensified Chinese action.

As Cointelegraph reports, Kazakhstan predicts that cryptocurrency mining will add at least $ 1.5 billion to its economy within five years. The country’s current mining hash rate is the second largest in the world after the United States.