Bybit, a cryptocurrency derivatives exchange that caters to all types of traders, with a focus on providing an ultra-fast matching engine, has received an ‘in-principle’ license from Astana Financial Services Authority (AFSA), Kazakhstan’s regulatory agency.
According to a press release shared with media platforms on Monday, the approval allows Bybit to operate a crypto trading platform in addition to offering digital asset custody services at the Astana International Financial Centre (AIFC), the country’s financial hub located in Astana.
Kazakhstan – Bybit’s Gateway to The CIS Region
Bybit would be required to comply with a set of pre-conditions which will pave the way for a permanent permit after successfully going through the entire licensing procedure.
The co-founder and CEO of Bybit, Ben Zhou emphasized the company’s commitment to compliance with regulators in Kazakhstan, stating that the Commonwealth of Independent States (CIS) has “promising potential” as the region’s cryptocurrency hub.
“We are delighted to receive an in-principle approval from AFSA,” Zhou. “We believe in the promising potential of the Commonwealth of Independent States (CIS) and are eager to open up our world-class trading platform from crypto enthusiasts in the region.”
However, the approval comes barely a month since Japan’s Financial Services Agency (FSA) flagged several crypto exchanges, including Bybit for operating in the country without proper registration, Cointelegraph reported on the matter in early April.
“It has always been our primary objective to operate our business in compliance with relevant rules and regulations,” Zhou emphasized. “Bybit firmly supports the regulatory objective of establishing a compliant, secure, and transparent cryptocurrency industry to benefit users.”
Kazakhstan is known as a key entry point in the fast-growing CIS market that is quickly adopting cryptocurrencies.
The region has become a center for crypto-focused businesses, mining, and blockchain development. Bybit’s entrance into Kazakhstan is a testament that the exchange sees the potential of the growing market in the region.
Bybit Is On An Expansion Overdrive
The Zhou-led crypto exchange has over the last few months pushed its expansion agenda internationally, including the location of its global business unit in Dubai.
According to a report published by Finance Magnets, Bybit believes the move to Dubai will help the company assert its presence in the Middle East and North Africa (MENA).
Headquartered at the Dubai World Trade Center, the global business unit is expected to allow Bybit to host hackathons, and educational programs and promote entrepreneurial activities in the fast-growing Web3 industry.
Bybit is positioning itself to compete in the expanding blockchain industry, which has seen the entry and exit of many companies in recent years.
Kazakhstan’s Tightens Grip on Cryptocurrencies
Although Kazakhstan has been a crypto-progressive country for many years now, regulations only came into effect in 2018. Motivated by its position as one of the leading global destinations for Bitcoin mining, the AFSA released a policy paper on January 27, 2023.
The Kazakh regulator stated at the time that the Astana International Financial Centre’s Digital Asset Trading Facility (DATF), which had been in place since 2018 contained some issues and needed enhancement.
The regulator revealed the presence of “contradictions, inefficient provisions, and uncertain definitions within the regime.” One of the recommendations from the AFSA was the introduction of risk mitigation policies about governance, illegal activity, and the custody of customers’ digital assets.
Kazakhstan’s regulator believes that restructuring the DATF framework can take either of the three forms provided in the paper, starting with maintaining the current framework’s structure, establishing a separate DATF framework, or considering cryptocurrency exchanges as a multilateral trading platform.
In the end, the AFSA believes that it will create a regulatory framework that allows crypto exchanges to operate in addition to nurturing innovation.
“This will collectively help to create more a clear, convenient, efficient, detailed and balanced AIFC DATF framework with high standards for consumer protection, without hindering the development of crypto exchanges,” the AFSA said in the paper.
Meanwhile, the central bank in Kazakhstan has considered developing a central bank digital currency (CBDC) this year, which would be introduced in a phased plan with a commercial rollout expected by the end of 2025.
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