- In a bid to tighten control over illegal crypto activities, Uzbekistan has implemented a new law that introduces stricter penalties for trafficking and mining of digital assets.
- Per the law, individuals involved in illicit activities related to crypto assets may face fines, correctional labor, restrictions, or imprisonment, depending on the severity of the offense.
President Shavkat Mirziyoyev of Uzbekistan has signed the law, which aims to enforce administrative and criminal liability for unlawful practices in the extraction and utilization of digital assets.
The law seeks to address “new types of crimes committed using digital technologies” and includes provisions in the Criminal Procedure Code of Uzbekistan that cover violations in the sphere of crypto asset circulation and illegal mining.
Under the new regulations, the unauthorized acquisition, sale, or exchange of digital assets, as well as operating as a service provider without the appropriate license, can result in fines or correctional labor for up to three years, restrictions, or imprisonment for up to one year.
In cases where these offenses are committed repeatedly or on a large scale, the fine may increase to four hundred calculation units, and the restriction of freedom may extend up to three years.
Additionally, the law introduces penalties for mining anonymous cryptocurrencies or illegally extracting digital assets. Offenders may face fines, correctional labor, restrictions, or imprisonment for up to one year.
Corresponding amendments have also been made to the Code of Administrative Responsibility of Uzbekistan. If an offense in the crypto asset circulation or mining sector is classified as administrative, it can lead to a maximum of fifteen days of arrest or a fine of up to thirty calculation units along with the confiscation of crypto assets and equipment used for illegal activities.
It is worth noting that the law provides an expanded interpretation of terms such as “crypto asset” and “mining.” Crypto assets are defined as digital records in a distributed ledger with value and ownership, while mining refers to the activity of maintaining a data register, creating blocks, and validating their integrity through computational operations.
In Uzbekistan, only registered legal entities are allowed to engage in mining activities. In September, a new law was signed to establish a licensing procedure for mining companies, which took effect in October 2023.
Earlier this year, two banks in Uzbekistan received approval to issue crypto cards, with the UzNEX cryptocurrency exchange serving as the country’s sole authorized service provider.