Regulation: Kazakhstan limits Crypto investment

Kazakhstan has introduced regulations to limit how much retail investors can put into cryptocurrency investments using crypto exchanges. This was contained in a report published by local news outlet Kapital.kz.

According to Kapital, the regulatory limits rook effect on October 26, 2021.

Based on the regulation, retail investors can invest up to $1000 monthly without verification of their financial status. Following verification, investors can purchase assets to the tune of 10% of their annual income or 5% of their assets (excluding the cost of main housing) but not exceeding $100,000.

AFSA explained that the limits were introduced to protect investor interest and reduce the risk of capital loss.

Roadmap for Development of Cryptocurrency Market approved

AFSA also noted the roadmap for the development of the cryptocurrency market has been approved. The implementation will begin with a pilot project of crypto exchanges at the end of 2021, and for one year. Upon completion, adjustments will be made to the legislation, and the AIFC acts as may be required.

Earlier, the AIFC FINANCIAL Services Regulatory Committee proposed a similar but less strict regulation with a $2000 investment limit. Indications suggest this regulation was what morphed into the new AFAS guideline.

Several experts have noted that the introduction of limits is a welcome idea. However, some noted that it was inevitable for the trading of digital assets to happen outside the cryptocurrency exchanges.

Arman Konushpaev, vice president of the BlockchainKZ Association of Developers and Users of Blockchain Technology noted that imposing limits was a global practice.
“Limits will help protect non-professional investors from financial losses when investing in cryptocurrency, including from various fraudulent schemes,” he said.

Mining-related Regulations

Meanwhile, the country is also exploring several regulations related to mining activities in the nation-state.

With the ban on mining in China in May and the emigration of miners, mining activities in Kazakhstan surged. By June, Kazakhstan was third on the global market. This surge has led to severe electricity shortages in the country.

Thus, the country is exploring regulations to limit electricity consumption for crypto mines to 100KW. Also, it will start the taxation of mining from January 1, 2022.