Digital Asset Regulation in Kazakhstan: Legal Framework, Risks and Opportunities for Business

Following the enactment of the Law of the Republic of Kazakhstan “On Digital Assets” in 2023, digital assets have been formally recognised as proprietary rights recorded in electronic form by means of distributed ledger technology.

The legislation distinguishes two principal categories:

• Secured digital assets — those backed by an underlying asset or a right of claim
• Unsecured digital assets — cryptocurrencies not backed by any tangible asset (including Bitcoin and Ethereum)

This classification is of fundamental importance, as it determines the applicable legal regime governing the circulation and treatment of each category.

The national legislation of the Republic of Kazakhstan adopts a restrictive approach to the circulation of unsecured digital assets. The key regulatory provisions are as follows:

• The trading of cryptocurrencies outside regulated platforms is prohibited
• The use of digital assets as a means of payment is not permitted
• All transactions involving digital assets are subject to anti-money laundering and counter-terrorism financing (AML/CFT) controls

Accordingly, any cryptocurrency transactions conducted outside the regulated infrastructure carry heightened legal and compliance risks.

A distinctive feature of the Kazakhstani regulatory model is the existence of a separate legal regime within the Astana International Financial Centre (AIFC). The AIFC framework permits the following activities:

• Operation of cryptocurrency exchanges
• Custody and circulation of digital assets
• Participation of investors in digital asset transactions
• Licensing of fintech companies

The AIFC regulatory framework is grounded in the principles of English common law and provides a more flexible and predictable environment for business. For the majority of projects involving digital assets, the AIFC represents the sole lawful vehicle for structuring operations within Kazakhstan.

Engaging in digital asset-related activities requires strict adherence to a comprehensive set of regulatory obligations:

• Obtaining the requisite licence (depending on the nature of the activity)
• Implementation of KYC/AML procedures
• Adoption of internal risk management policies
• Disclosure obligations towards clients and investors
• Compliance with financial monitoring requirements

Non-compliance with these requirements may give rise to both administrative and criminal liability.

The tax regime applicable to digital assets continues to evolve; however, the following principles are already in effect:

• Income derived from digital asset transactions is subject to taxation
• Cryptocurrency mining is subject to dedicated levies and charges
• Enhanced scrutiny is being applied to cross-border transactions and capital flows

Particular emphasis is placed on the transparency and verifiability of the sources from which digital assets originate.

In practice, the principal legal risks confronting market participants include:

• Utilisation of unlicensed trading platforms
• Incorrect legal classification of digital assets
• Failure to comply with AML/KYC obligations
• Raising investment capital in breach of applicable regulatory requirements
• Conducting operations outside the AIFC jurisdiction where such registration is required

In many instances, these risks are not immediately apparent and only materialise at the stage of engagement with banking institutions or regulatory authorities.

The regulation of digital assets in Kazakhstan continues to develop along the following trajectories:

• Introduction of the digital tenge as a form of central bank digital currency (CBDC)
• Tightening of regulatory requirements for cryptocurrency platforms
• Development of a regulatory framework for secured digital assets
• Alignment with international financial monitoring standards

These developments reflect the government\u2019s commitment to fostering a controlled yet competitive digital asset ecosystem.

For businesses operating in the digital asset space in Kazakhstan, the overarching principle is clear: lawful activity is only achievable through a properly structured legal framework and full compliance with regulatory requirements. In practical terms, this entails:

• Selecting the appropriate jurisdiction (in most cases, the AIFC)
• Conducting a preliminary legal assessment of the business model
• Establishing a robust compliance infrastructure
• Managing ongoing engagement with regulators and financial institutions

Given the complexity and rapid evolution of the regulatory landscape, the launch and development of digital asset projects demands a comprehensive legal approach. Professional legal counsel enables businesses to:

• Structure their business model in accordance with applicable legislation
• Mitigate regulatory and tax-related risks
• Ensure compliance with AIFC requirements
• Prepare licensing documentation and investment materials