Coinbase faces exclusion in Kazakhstan amidst broader controversy
Coinbase, the leading cryptocurrency exchange in the United States, is currently under investigation for alleged money laundering in Kazakhstan. The Ministry of Culture and Information in Kazakhstan has confirmed that access to Coinbase has been blocked due to violations of local digital asset regulations. However, the government has recently unblocked global trading platforms Interactive Brokers and the New York Mercantile Exchange (NYMEX) after previously blocking them earlier this year.
According to the Ministry of Information, access to Coinbase was restricted at the request of the Ministry of Digital Development, citing the trading of cryptocurrencies on the exchange as a violation. This goes against Clause 5, Article 11 of Kazakhstan’s Law on Digital Assets, which prohibits the trading of uninsured digital assets on exchanges. Licenses to operate crypto exchanges have been granted to platforms like Binance and Upbit, but only within the special economic zone of the Astana International Financial Centre (AIFC).
Coinbase was blocked under the provisions of the Communications Act, which requires providers to restrict access to websites containing prohibited information. While Coinbase is one of the largest global crypto trading platforms, it does not have permission to offer services outside of the AIFC jurisdiction in Kazakhstan.
Previously, Interactive Brokers and NYMEX were also blocked. Interactive Brokers was included in the state censorship database by the Financial Monitoring Agency for alleged fraudulent activities, while NYMEX was accused of unauthorized Bitcoin and Ethereum futures trading. However, the Information Ministry has restored access to Interactive Brokers after receiving a request from the Financial Monitoring Agency. The reasons for unblocking NYMEX remain unknown, as it continues to offer crypto futures trading outside of AIFC regulations.
The recent blocking of major foreign trading platforms has faced criticism from experts, who view it as a mistake. Economist Rasul Rysmambetov speculated that technology specialists had failed to properly analyze the sites before making the decision. Under AIFC rules, foreign companies can obtain licenses to offer financial and technology services within the special economic zone, either through the AFSA regulatory committee or by joining the “FinTech Lab” regulatory sandbox.
While Coinbase remains blocked in Kazakhstan for cryptocurrency violations, the unblocking of Interactive Brokers and NYMEX without explanation has puzzled experts. The government continues to hold foreign trading platforms to strict standards and regulations.
