Kazakhstan's Ministry of Culture and Information has taken a decisive step in its ongoing efforts to regulate the burgeoning cryptocurrency market, blocking access to global cryptocurrency exchange, Coinbase (NASDAQ:COIN). The move follows the implementation of the Law on Digital Assets initiated in February 2023, which mandates digital currency activities to secure a license from the Astana International Financial Center (AIFC).
The blockage, reported by local news outlet Kursiv, is part of a broader strategy by the Kazakh government to manage digital assets and introduce a Central Bank Digital Currency (CBDC). The so-called "great Kazakh investment firewall" has been causing access issues to Coinbase and other exchanges like Kraken since September.
Several exchanges, including Binance, Bybit, CaspianEx, Biteeu, ATAIX, Upbit and Xignal&MT have managed to secure approval from AIFC, thereby ensuring their continued operation within the country. However, Coinbase's failure to comply with these licensing requirements has resulted in its current blockage.
In addition to exchange regulation, Kazakhstan's strict rules also extend to its prominent mining sector. In October, eight major crypto-mining firms penned an open letter to President Kassym-Jomart Tokayev, highlighting a "very distressful situation" due to high energy costs.
The implications of this blockage are significant for both Coinbase and its Kazakhstani users. With a surge in cryptocurrency interest and usage in the country, users will no longer be able to trade or access their accounts on the platform. The response from Coinbase regarding this regulatory action is yet to be seen.
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