Kazakhstan is facing a significant loss of crypto assets estimated at $15 billion, attributed to a lack of adequate regulation. The central bank is preparing new rules.
Massive Crypto Asset Withdrawals from Kazakhstan
According to Kazakhstan's central bank, crypto assets worth approximately $15 billion have been withdrawn from the country. Deputy Chairman Berik Sholpankulov disclosed this during a press conference, mentioning that the primary reason for the leak is the lack of structured legal regulation. He stated: > "It’s a fact that administrative and legal regulation is not sufficiently structured so that citizens could invest safely."
Kazakhstan's Strategy to Legalize Crypto Trading
Kazakhstan's financial regulators are developing a new approach that includes tighter control over the circulation of digital assets and the introduction of criminal and administrative liability for illegal transfers of cryptocurrency abroad. In the future, authorities will be able to track cryptocurrency transactions, as currently it is not possible to trace the $15 billion exported from the country. A specialized system is planned to be established for tracking such transactions.
Economic Consequences of Insufficient Regulation
Crypto activity in Kazakhstan has been growing, especially after the influx of mining companies following the ban imposed by China. Due to limited options for selling crypto, many miners have been transferring their profits outside the country. This has resulted in over 91% of all transactions in 2023 occurring in the gray market. Authorities have begun to realize that they are losing revenue and plan to legalize crypto trading outside the financial hub in Astana. Deputy Minister for Digital Development Kanysh Tuleushin highlighted that the tax revenues from the mining sector totaled $35 million, and a more flexible approach could lead to significantly increased budget revenues.
Given the above, Kazakhstan's future steps towards legalizing and regulating crypto trading may lead to substantial improvements in the situation regarding the export of digital assets and provision of additional budget revenues.
