Uzbekistan has been clamping down on unregistered and unlicensed crypto exchanges in the country.
Binance, the world’s largest cryptocurrency exchange by trade volume has been affected by this decision with the likes of Sam Bankman-Fried’s FTX and Huobi. Binance’s head of Eastern Europe, Gleb Kostarev attested to the fact that since Tuesday, Uzbekistan users of Binance have not been able to access the website.
The National Agency of Perspective Projects (NAPP), the Uzbekistan state legal agency announced that the restrictions placed on crypto exchanges and over-the-counter brokerage firms are owing to the fact that the country does not allow its citizens to trade crypto on foreign platforms.
So far, the agency has noticed that there has been a rise in the number of crypto exchanges operating without a license. These cryptocurrency exchanges retrieve personal data from citizens without installing servers on the territory of the Republic of Uzbekistan.
The NAPP said that with such unguarded operations, these exchanges “do not bear any legal responsibility for carrying out transactions with crypto-assets, cannot guarantee the legitimacy of transactions, as well as the proper storage and confidentiality of personal data of citizens of the Republic of Uzbekistan.”
Citizens Warned To Desist From Unlicensed Crypto Platforms
As a warning, NAPP encouraged the citizens of Uzbekistan to be as vigilant as possible and not to engage with unlicensed platforms.
The citizens should beware that using the services of electronic platforms that have not received a license to operate on the territory of the Republic of Uzbekistan in the prescribed manner is regarded as unacceptable. Possibly, such entities might expose the users’ personal data inappropriately which may lead to the use of data by fraudsters.
Binance, FTX, Huobi, and Bybit have been placed under this category, hence, blocked from operating in the Republic of Uzbekistan. The only exchange that has been granted a license is UzNEX. Currently, Binance is in discussions with NAPP to negotiate its status in the country.
It has been a tough year for Binance as it has received several sanctions arguing its activities in many regions.
In February, the exchange was fined by the Dutch Central Bank for operating without a license. Also, Binance could not clarify the structure of its offering in Israel. Not long after, the United Kingdom financial watchdog, Financial Conduct Authority (FCA) expressed its displeasure over Binance’s deal with Paysafe due to its unclear schemes.