Kazakhstan Blocks Coinbase Under Digital Asset Law

Kazakhstan’s government has enforced a blockade on Coinbase, citing non-compliance with local licensing laws.

The Ministry of Culture and Information of Kazakhstan has officially acknowledged that it has restricted access to the Coinbase platform within the country. Reports indicate that Kazakhstan has been actively preventing local internet users from accessing Coinbase since September.

A report on November 7 by the Kazakh news agency Kursiv stated that the Ministry of Culture and Information ordered the restriction following a directive from the Ministry of Digital Development. The latter ministry charged Coinbase with contravening the nation’s Law on Digital Assets.

This legislation, which came into effect in February 2023, explicitly prohibits the issuance, trading, and operation of digital currencies and cryptocurrency exchange services without acquiring a local license. Authorization to engage in such activities is issued by the Astana International Financial Center (AIFC) Authority, operating within a specially designated economic zone in Kazakhstan.

Currently, the list of crypto exchanges licensed by the Astana Financial Services Authority includes Binance, Bybit, CaspianEx, Biteeu, ATAIX, Upbit, and Xignal&MT.

The initial signs of trouble for Coinbase emerged in September. Finance.kz, a local Telegram channel, reported that Kazakhstan’s “great Kazakh investment firewall” was not only obstructing Coinbase but also other significant global crypto exchanges like Kraken.

Kazakhstan has adopted a tough stance on regulating cryptocurrencies, extending to its significant crypto mining industry, which ranks among the largest globally. In October, eight major crypto mining companies penned an open letter to President Kassym-Jomart Tokayev, expressing that the mining sector is facing severe difficulties due to the elevated electricity costs impacting miners.