Uzbekistan Set to Block Foreign Cryptocurrency Exchanges – Regulation Bitcoin News

Uzbek authorities restrict access to online crypto trading platforms based outside the country and not registered under its laws. A presidential decree requires citizens and local businesses to use only digital asset exchanges authorized by the Central Asian nation’s government.

Uzbekistan Takes Steps to Prevent Trading and Custody of Crypto on Foreign Platforms

The Uzbek National Agency for Prospect Projects (NAPP) has recorded an increase in the activities of online platforms providing crypto-related services to Uzbekistanis without the necessary license. The regulator claims that these facilitate cryptocurrency trading and request personal information without complying with the requirement to locate their servers in the country.

In a recent statement, the agency stressed that these platforms “do not bear any legal responsibility for carrying out operations with cryptographic assets, cannot guarantee the legitimacy of transactions, as well as the correct storage and confidentiality of the personal data of the citizens of the Republic of Uzbekistan. In light of these findings, the regulator restricted access to their domains.

The announcement highlights that the government of Uzbekistan has made consistent efforts to improve the regulatory and institutional framework in the crypto space. A decree signed by President Shavkat Mirziyoyev in 2018 defined the types of business activities relating to digital assets as the mining of cryptocurrencies and the provision of services related to their circulation.

Vendors whose activities are subject to licensing include cryptocurrency mining pools, exchanges and custodians, as well as other crypto companies that offer individuals or legal entities services for buying, selling, the exchange, storage, issuance, placement and management of crypto assets.

Regulations passed last April allow Uzbekistanis and businesses based in their country to acquire, sell and trade cryptocurrencies exclusively on domestic platforms, starting January 1, 2023. NAPP now stresses that this does not mean not that local businesses and citizens have the right to conduct such transactions on foreign platforms before that date.

So far, Uzbekistan has allowed only one cryptocurrency exchange. Operated by South Korean entity Kobea Group, Uznex was launched in January 2020. Last fall, the National Prospect Projects Agency issued a warning to Uzbek crypto traders to avoid unlicensed exchanges, which leaves them with only one legal option.

The agency also reminded all residents of the country that they can conduct crypto transactions on exchanges registered with the national currency, the som, and sell crypto assets to non-residents for foreign fiat currency. NAPP urges Uzbek citizens not to use the services of online platforms that have not obtained a license to operate in the republic and to report them to law enforcement.

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Do you expect Uzbekistan to allow more cryptocurrency exchanges in the future? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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