Cryptocurrency exchange Bybit has recently received “in-principle” approval from regulators in Kazakhstan, as the company announced its pre-approval from the Astana Financial Services Authority (AFSA) to operate as a digital asset trading facility and as a custody services provider at the Astana International Financial Centre (AIFC). Ben Zhou, the co-founder and CEO of Bybit, expressed his belief in the “promising potential” of the Commonwealth of Independent States (CIS) as a region for growth in the crypto industry, while also stressing Bybit’s commitment to compliance with local regulations.
However, despite this positive development, it is important to note that Bybit was recently flagged by regulators in Japan for operating without registration, raising concerns about regulatory compliance in the crypto space. As it stands under the “in-principle” approval granted to Bybit, the company is subject to pre-conditions that will lead to permanent authorization to provide services to locals once the application process is fully completed.
Kazakhstan has been working towards becoming a regional hub for crypto, mining, and blockchain development. In February, local officials announced a new mandate that requires 75% of revenue made from crypto mining to be sold via a crypto exchange, as a means to crack down on tax evasion. Additionally, the country revealed that it collected around $7 million in crypto taxes for the year 2022 and is currently in the pilot phase of developing its digital currency.
In the context of these recent developments, it is clear that, while there is significant potential for growth in the crypto industry in the CIS region, regulatory compliance remains a crucial factor for success. Bybit’s recent regulatory advance in Kazakhstan could certainly be viewed as a positive step forward, but the question of whether it will be able to maintain compliance across all jurisdictions remains open for debate.
All in all, the balance between realizing the full potential of the crypto industry in the region and ensuring a stable, regulatory compliant environment is a complex task, and Bybit’s experience in Kazakhstan serves to illustrate the hurdles that crypto companies may face in their quest for expansion.
Source: Cointelegraph
