Uzbekistan is cracking down on exchanges failing to comply with the local regulatory framework. On Wednesday, the Uzbekistan government announced that it would restrict access to some of the leading foreign cryptocurrency exchanges following accusations of conducting their operations without the proper licenses.
Uzbekistan suspends access to foreign crypto firms
Before this move, the Uzbekistan government had made several progressive steps towards embracing the crypto industry. However, as crypto activities in the country continue to grow, the government is now taking a closer look at how crypto firms comply with local laws and regulations.
The National Agency of Perspective Projects (NAPP) released a statement on August 10 saying that several electronic platforms offering services related to trade and exchanging crypto assets without acquiring the necessary license had violated the existing laws. Therefore, their services were banned.
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However, the statement also hinted that these exchanges needed to obtain these licenses and fulfill all the registration requirements for their services to be supported in Uzbekistan. If they complied with the local law requirements, foreign exchanges would not face any more hindrances in their operations.
However, at the moment, these exchanges do have the legal authority to support transactions in crypto assets, and they cannot legitimize these transactions. Additionally, they cannot take custody of the confidential personal data of the country’s citizens.
Crypto regulations in Uzbekistan
The legislation that exchanges in Uzbekistan are expected to comply with is the presidential decree of July 2018 addressing the measures to support the growth of the digital economy and the turnover of crypto assets in Uzbekistan.
The NAPP is the crypto regulatory authority in Uzbekistan. However, it gained its status as a crypto regulator in April 2022. At the time, Uzbekistan’s president, Shavkat Mirziyoyev, said that the government was committed to creating an agency that would work towards adopting a special crypto regulatory framework in Uzbekistan.
In June this year, the NAPP stated that it would only permit the companies using solar energy to conduct crypto mining activities. Mining operators in the country were also mandated to seek a certificate and register as crypto mining companies with the registry.
Some leading crypto firms have found their way into Uzbekistan, including Binance, Huobi, and FTX. These are some of the exchanges that will be affected by the newly implemented changes by the government.
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