Authorities in Uzbekistan are now clamping down on online crypto trading platforms that operate outside the nation and are not registered with the government.
Authorities have mandated that platforms hold a license in order to provide digital currency services to users. However, they have observed in recent weeks that numerous exchanges are providing their services without their consent or permits.
Among the crypto exchanges whose access to have been blocked are Binance and FTX, and the directive is an attempt to guarantee that companies in the field adhere to government regulations.
Binance’s chief of Eastern Europe operations Gleb Kostarev has acknowledged that the exchange’s website has been inaccessible to Uzbek users since Tuesday. As he said, the ban extends to Huobi, FTX, Bybit, and others.
Uzbekistan has only licensed one exchange thus far. In January of 2020, Uznex was introduced by the South Korean company Kobea Group.
Uzbekistan Says Obey Our Crypto Laws
The government is now working on a regulatory structure for the bitcoin market, with one of its primary goals being to ensure that activity is conducted “in accordance with statutory actions.”
The National Agency of Prospective Projects (NAPP) of Uzbekistan has observed an increase in the number of unlicensed internet platforms offering virtual currency-related services to Uzbek citizens.
A presidential directive mandates that people and local businesses use only government-licensed digital asset exchanges in the Central Asian nation.
Uzbekistan is serious about its crypto laws. Image: Blockchain News
These unregistered activities, according to the regulatory agency, encourage the trade of cryptocurrencies and request personal information without complying with the need that their servers be installed in the country.
In a declaration, the government stated:
“Presently, the activities of various electronic platforms that provide services to citizens of the Republic of Uzbekistan on trade and (or) exchange of crypto-assets without the requisite license for the operations of service providers on the territory of the nation are intensifying.”
Uzbekistan To Foreign Crypto Exchanges: Get License First
The decision reflects the government of Uzbekistan’s persistent efforts to improve the institutional and regulatory framework in the cryptocurrency field.
Uzbekistan has been regulating these asset types and making significant attempts to modernize its framework since 2018. In order to operate in the country, crypto exchanges, mining businesses, and custody providers are required to obtain licenses.
Starting January 1, 2023, only domestic or licensed platforms may be used for trade by nationals of the country. Until then, it is unclear if citizens can participate in foreign exchanges.
Globally, governments are cracking down on the centralized portions of the digital currency sector. Authorities have targeted a number of cryptocurrency exchanges in an effort to exert control over the rapidly expanding asset class.
Crypto total market cap at $1.1 trillion on the daily chart | Source: TradingView.com Featured image from What’s My IP Address, Chart from TradingView.com