Crypto License in Kazakhstan

It is important to understand that different requirements apply to businesses depending on the type of activity (including technical aspects such as platform operation or fund custody, etc.), however, the core requirements common to all remain mandatory transparency, compliance with AML/CFT procedures, a clear organizational structure, disclosure of ownership, customer protection, and ongoing monitoring of operations, risks, and cash flows.

Systems must be secure, and during its review, the AFSA must ensure that the business meets these requirements.

Registering a Crypto Company in Kazakhstan

As we have already noted, to conduct crypto-related activities and obtain a crypto license in Kazakhstan, it is necessary to establish a local presence. First and foremost, this involves setting up a company in the AIFC (with a registered office within its territory). To establish a company, one director and one shareholder are required, and there are no residency requirements for these individuals. The key requirement is that these individuals have no criminal record in any country (supporting documents must be provided to the regulator). It is important to understand that both during company formation and during the licensing process, the regulator thoroughly evaluates the company’s management and owners, their documents, as well as the origin of funds and other factors.

Before commencing operations, it is essential to prepare thoroughly to avoid delays or rejections in the future. SBSB Fintech Lawyers are happy to assist you along this path. 

Licensing and Registration

The registration and licensing process for crypto companies in Kazakhstan is administered by the  AIFC and is structured, systematic, and requires strict compliance with regulatory requirements. The AFSA serves as the regulatory authority that reviews applications and, once a license is granted, supervises and monitors the activities of licensed entities.

The registration and licensing process for crypto companies in Kazakhstan is administered by the AIFC and is structured, systematic, and requires strict compliance with regulatory requirements. The AFSA serves as the regulatory authority that reviews applications and, once a license is granted, supervises and monitors the activities of licensed entities.

The business model and intended activities clearly determine the required type of license. For the crypto business, licenses are available for Operating a Digital Asset Trading Facility, Arranging Custody Services, Dealing in Investments as Agent, and Dealing in Investments as Principal. For each type of activity, there are specific requirements regarding authorized capital, the existence of processes and policies, as well as compliance with other requirements.

Once the applicable classes and operational model have been determined, a local company is established with a registered office within the AIFC. Concurrently, a list of documents and policies corresponding to the anticipated activities is developed, local staff are recruited, and, if necessary, the IT infrastructure is developed or brought into compliance.

AFSA pays particular attention to security, the safeguarding of client funds, and compliance with AML/CFT requirements, which include client identification, transaction monitoring, and mandatory reporting of suspicious transactions. These processes must comply with international standards. After submitting the application and other documents, AFSA evaluates their compliance and may request additional information to ensure that the business complies with regulations. Licenses are issued on a permanent basis (provided that requirements are continuously met). 

Requirements for Obtaining a Cryptocurrency License in Kazakhstan 

The path to obtaining a crypto license in Kazakhstan begins with establishing a local company, as we noted earlier. The company may be established by foreigners; there are no residency requirements, and at least one shareholder and one director are required. It is mandatory that senior management and owners have no criminal records in any jurisdiction. 

A number of requirements apply to the company; in particular, the authorized capital requirement varies depending on the type of activity, ranging from 50,000 USD for “Dealing in Investments as Agent” to 500,000 USD for “Dealing in Investments as Principal.” 

The company must also confirm a local presence, specifically through a local office. It is mandatory to have responsible officers, including a Chief Executive Officer, Chief Financial Officer, Internal Audit Manager, and Risk Officer, the number of whom depends on the scope of operations, business specifics, and other factors (confirmation of knowledge and experience is also mandatory).

It is also mandatory to have AML/Compliance specialists (Compliance Officer, MLRO) who will ensure that the company’s operations comply with regulatory requirements. 

In addition, the crypto company must develop clear and understandable policies that describe operations not in theory but in practice. A cybersecurity system must also be established to detect transactions, users, and their activity, as well as to flag risks.

The company must be fully prepared to successfully complete the AFSA licensing process and begin operations in Kazakhstan. 

Obligations for Conducting Crypto Business in Kazakhstan

As we mentioned earlier, obtaining a crypto license in Kazakhstan requires businesses to strictly comply with the standards, procedures, and rules established by the regulator. 

In addition to capital requirements, which demonstrate a company’s ability to conduct business and ensure financial stability, companies must meet a number of requirements to confirm their compliance with regulatory standards. To ensure compliance, the company must employ individuals with relevant knowledge and experience (which will also be verified by the AFSA), including the Chief Executive Officer, Chief Financial Officer, Compliance Officer, MLRO, Internal Audit Manager, and Risk Officer. These individuals must actually perform the functions assigned to them and ensure the operation of the business. 

The business must also submit annual reports, including registers of shareholders, directors, and beneficial owners.

Company directors must approve the company’s financial statements and have at least one director sign them on their behalf.

Equally important is the annual external audit of the company, which must be conducted by auditors approved by the AIFC.

Essential requirements include monitoring the movement of crypto assets, specifically identifying senders and recipients, conducting risk analysis of transfers, and mandatory reporting to the AFSA regarding suspicious transactions.

The company must prioritize the protection of its clients and take measures to prevent the use of crypto in criminal schemes.