ForkLog spoke with Yagub Zamanov, Director of the Financial Technology Department of the AIFC Financial Services Regulation Committee, about the new regulations for bitcoin exchanges, among other topics.
Kazakhstan plans to become a regional crypto hub, but to do so the country will need to improve regulation of the industry and mitigate risks against the backdrop of declining market capitalization, as well as a series of bankruptcies of large international companies.
Thus, ForkLog spoke with the Director of the Financial Technology Department of the AIFC Financial Services Regulation Committee about the new regulations for bitcoin exchanges, the development of local startups, and the collapse of FTX.
Kazakhstan’s New Regulations for Bitcoin Exchanges
ForkLog (FL): Hi Yagub. In April, Kazakhstan’s financial regulator announced the initiative for the creation and development of exchanges based on the AIFC. How many cryptocurrency-related companies have been licensed by the center so far?
Yagub Zamanov (Ya.Z.): To date, we already have nine authorized suppliers. Most of them are cryptocurrency exchanges, cryptocurrency broker QuantDART FinTech Limited, as well as tokenized stock exchange Bitfinex Securities.
FL: Some of the commercial platforms you mentioned are participating in a pilot project for interaction with commercial banks. What is it about?
Ya.Z.: Exchanges have access to second-tier banks (STBs) and can now open bank accounts, accept fiat currencies from clients, exchange them for digital assets, and vice versa.
In general, the pilot project works successfully under the strict control of the working group, which includes representatives of the AIFC, the National Bank of Kazakhstan, ICRIAP, ARRFR, and AFM. By the end of 2022, we will summarize the results of this interaction in more detail.
Development of Local Startups in Kazakhstan
FL: Has the number of Blockchain startups in the country increased?
Ya.Z.: If we take the Blockchain technology itself, then there can be an absolute multitude of projects not necessarily related to financial services. Their teams tend to be very forward-thinking and offer innovative products. Interest in the development of this area has always been at a high level.
Perhaps the current crisis in the crypto markets affects the number of specialized startups, but I think this will be more of a leak than the death of the entire industry.
The Collapse of FTX
To conclude the interview, Zamanov claimed that the major problem with FTX was the lack of proper regulation, which, according to him, “allowed the misuse of client funds for their own purposes. As a result, the exchange lost many assets and eventually filed for bankruptcy.”
The director is positive that regulating the crypto market will not take long, adding that back in 2018, “the first rudiments of a regulatory regime for digital assets appeared.”
In his view, nowadays, international practice is taken into account and, at least in Kazakhstan, they will try to prevent existing risks. All of this is within the framework of the pilot project, as well as of the future new regulatory regime.
By Audy Castaneda
