Coinbase Under Investigation for Money Laundering in Kazakhstan
The largest cryptocurrency exchange in the United States, Coinbase, is facing a money laundering investigation in Kazakhstan. The country’s Ministry of Culture and Information has confirmed blocking Coinbase due to alleged violations of local digital asset regulations.
Access to Coinbase Restricted
The Ministry of Information stated that access to Coinbase was restricted at the request of the Ministry of Digital Development. This is because Coinbase allowed trading of cryptocurrencies, which is prohibited under Kazakhstan’s Law on Digital Assets. The law specifically prohibits the issuance and circulation of uninsured digital assets and the operation of exchanges trading such assets.
Brokers Interactive Brokers and NYMEX Also Affected
In addition to Coinbase, broker Interactive Brokers and commodities exchange NYMEX were also affected by access disruptions. Interactive Brokers was included in the state censorship database over alleged fraudulent activities, while NYMEX was accused of unauthorized Bitcoin and Ethereum futures trading.
Access Restored for Interactive Brokers, NYMEX Remains Unblocked
The Information Ministry has restored access to Interactive Brokers after a request from the Financial Monitoring Agency. However, no reasons were provided for unblocking NYMEX, which continues offering crypto futures trading outside the jurisdiction of the Astana International Financial Centre (AIFC).
Foreign Trading Platforms Held to Strict Standards
The recent blocking of major foreign trading platforms has received criticism from experts who believe it was a mistake. Under AIFC rules, foreign companies can obtain licenses to operate within the special economic zone by meeting regulatory requirements. However, even with licenses, foreign trading platforms are held to strict standards to ensure compliance with local regulations.
Hot Take: Government Crackdown Continues as Coinbase Investigated
The government of Kazakhstan is intensifying its crackdown on the crypto industry, as Coinbase becomes the target of a money laundering investigation. While other global trading platforms like Interactive Brokers and NYMEX have been unblocked, Coinbase remains restricted due to alleged violations of digital asset regulations. The situation has drawn criticism from experts who question the government’s decision-making process. As the country grants licenses to operate crypto exchanges within the special economic zone, foreign companies must adhere to strict standards. This ongoing scrutiny highlights the government’s commitment to ensuring compliance with local regulations in the crypto sector.
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