Mining in Kazakhstan
For a long time, this Central Asian country was a place that attracted crypto enthusiasts.. The country has formed a relatively favorable infrastructure for the production of cryptocurrencies. However, the situation began to change in early 2022, shortly after the ban on cryptocurrencies in China.. Then, in January, riots broke out in Kazakhstan. A little later, the local government decided to seriously take up the legislative “crackdown”.
Before starting to describe in detail what and where you can do with cryptocurrency in Kazakhstan, let's turn to how such a business interprets the law.. Cryptocurrency in the republic is not money and does not have the status of a legal tender, but is recognized as property and a “digital asset”. What does it mean? For example, that to come anywhere and pay with the same bitcoin will not work. But you don’t need to pay any separate tax on cryptocurrency. At least for now, until such a tax is introduced.
But mining is already taxed. In July 2022, President Kassym-Jomart Tokayev signed a law increasing fiscal pressure. It is understandable, according to various sources, Kazakhstan ranked second or third in terms of mining in the world.. Naturally, legislators considered it relevant to use this fact to fill the budget.
The tax period for mining tax is a quarter. Payment must be made no later than the 20th day of the month following the reporting quarter. For example, we are now in the first quarter of 2023. Therefore, the tax for it must be transferred to the budget no later than April 20, 2023.
The amount of tax is determined as 1 tenge per 1 kilowatt-hour. At the same time, the maximum rate is 10 tenge per 1 kWh, provided that electricity is expensive, and the tariff for it is in the range of 5-10 tenge. For those who receive electricity from renewable sources, the rate may be reduced.
Since you have to pay a tax, then it must be collected, but how can this be done without registration? No way. Indeed, in Kazakhstan, by law, it is mandatory to register mining farms with the state. It is quite simple to do this: within a month, notify the Information Security Committee of the Ministry of Digital Development, Innovation and Aerospace Industry of Kazakhstan in writing. The application must indicate the details of the company, the location of the farm, the capacity of the equipment used, the potential for expansion and how much you have invested in the project.
Well, as for adventurers (of course, there are also those) who mine in the gray, it should be borne in mind that if they are found, then not only fines will follow, but also the seizure of equipment.
Cryptocurrency trading
You can trade, but not everywhere. If, for example, in Russia any licensed bank provides access to the stock market, then in Kazakhstan, in order to carry out the activities of the exchange, you need to have a license from the Astana International Financial Center (AIFC). Xignal was the first site to receive a green light in the country. AIFC licenses are also held by ATAIX Eurasia, BITEEU Eurasia (better known as Intebix in Kazakhstan) and others.. Recently, the world-famous exchange Binance has also acquired it.
That is, if you want to legally trade on Kazakhstani exchanges, they must have AIFC licenses. This does not mean that you will not be able to use the services of exchanges that have other jurisdictions.. Marketplaces like Huobi, Bybit or KuCoin are also completely accessible.. There you can buy cryptocurrencies for tenge. Each exchange has its own limit limits.
There are also restrictions on exchanges licensed by the AIFC. Freely and without providing any clarifying data, you can buy cryptocurrencies for no more than $1,000 per month. If you confirm your income and your assets, then the maximum amount for which you can buy cryptocurrencies is $100,000.
Cryptocurrency exchangers in Kazakhstan
Here the situation is not much different from stock exchanges.. Crypto exchangers that operate on the territory of the republic must have an AIFC license. If not, then they are outlaws.. It was precisely such enthusiasts who were recently covered by law enforcement officers in the north of the country.
“Crypto exchangers will not become legal. They are not legalized in any jurisdiction: neither in the national jurisdiction nor in the AIFC jurisdiction. In the jurisdiction of the AIFC, in fact, only crypto-exchanges operate legally, and this is a completely different system, ”explains Ekaterina Smyshlyaeva, a former deputy of the lower house of the Parliament of Kazakhstan (Mazhilis).
In a nutshell: mining and trading of crypto-currencies are allowed in Kazakhstan. Crypto farms must be registered, and exchanges where trade takes place under the jurisdiction of Kazakhstan must have a license from a special state organization, the AIFC. Crypto exchanges, for the most part, are illegal.
This material and the information in it does not constitute individual or other investment advice.. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.