Bybit crypto exchange receives pre-approval to operate in Kazakhstan’s AIFC

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(Kit­co News) —
Bybit, the 10th largest cryp­to exchange by vol­ume and the 3rd most vis­it­ed, has received in-prin­ci­ple approval from Kaza­khstan’s Astana Finan­cial Ser­vices Author­i­ty (AFSA), accord­ing to an announce­ment pub­lished Monday.

The pre-approval means that once Bybit ful­fills the nec­es­sary con­di­tions to com­plete their full appli­ca­tion process, they will receive a per­ma­nent license from the AFSA, enabling them to oper­ate a Dig­i­tal Asset Trad­ing Facil­i­ty and pro­vide Cus­tody Ser­vices at the Astana Inter­na­tion­al Finan­cial Cen­tre (AIFC).

“We are delight­ed to receive an in-prin­ci­ple approval from AFSA,” said Ben Zhou, Bybit’s co-founder and CEO. “We believe in the promis­ing poten­tial of the [Com­mon­wealth of Inde­pen­dent States] and are eager to open up our world-class trad­ing plat­form for cryp­to enthu­si­asts in the region.” 

Kaza­khstan is a lead­ing mem­ber of the Com­mon­wealth of Inde­pen­dent States (CIS), a region that is estab­lish­ing itself as a hub for cryp­tocur­ren­cies, min­ing, and blockchain development. 

The exchange said they are “com­mit­ted to oper­at­ing in line with reg­u­la­to­ry frame­works” and said that the AIFC “leads the way as a pro­gres­sive fin­tech juris­dic­tion” and pro­vides a reg­u­la­to­ry frame­work for cryp­to devel­op­ment in oth­er CIS countries. 

“It has always been our pri­ma­ry objec­tive to oper­ate our busi­ness in com­pli­ance with rel­e­vant rules and reg­u­la­tions,” Zhou said. “Bybit firm­ly sup­ports the reg­u­la­to­ry objec­tive of estab­lish­ing a com­pli­ant, secure, and trans­par­ent cryp­tocur­ren­cy indus­try to ben­e­fit users.” 

Bybit has not always run its busi­ness in com­pli­ance with state reg­u­la­tors and it has run into reg­u­la­to­ry trou­ble as a result. 

On March 31, Japan’s Finan­cial Ser­vice Agency (FSA) sent let­ters to mul­ti­ple exchanges, includ­ing Bybit, warn­ing them that they are vio­lat­ing the country’s laws by oper­at­ing with­out a license. 

The FSA sent let­ters to Binance, MEXC Glob­al, Bybit, Bit­forex and Bit­get warn­ing them that their oper­a­tions are in vio­la­tion of the nation’s fund set­tle­ment reg­u­la­tions by facil­i­tat­ing the exchange of cryp­to assets with­out first com­plet­ing the reg­is­tra­tion process. 

The reg­u­la­tor issued its first for­mal warn­ing let­ter to Bybit for oper­at­ing with­out the nec­es­sary per­mis­sions back in 2021, but the exchange has yet to see any seri­ous con­se­quences for con­tin­u­ing to operate. 

The AIFC is work­ing to posi­tion itself as a glob­al cen­ter for busi­ness and finance and has attract­ed atten­tion from numer­ous cryp­to firms in recent months, includ­ing Bitfinex Secu­ri­ties, one of the first com­pa­nies to reg­is­ter and be licensed in the AIFC. 

Kit­co News spoke with Jesse Knut­son, Head of Oper­a­tions at Bitfinex Secu­ri­ties, when the com­pa­ny opened its new HQ in Kaza­khstan ear­li­er this year. 

“The [AIFC] has been mod­eled after the Dubai Inter­na­tion­al Finan­cial Cen­ter,” he said. “It oper­ates on Eng­lish com­mon law, so its legal sys­tem is com­plete­ly inde­pen­dent of the domes­tic Kaza­kh sys­tem, and then it’s got frame­works and laws that are more famil­iar to insti­tu­tion­al and for­eign investors. The idea is to give for­eign investors peace of mind and encour­age them to deploy cap­i­tal into Kazakhstan.” 

Dis­claimer: The views expressed in this arti­cle are those of the author and may not reflect those of Kit­co Met­als Inc. The author has made every effort to ensure accu­ra­cy of infor­ma­tion pro­vid­ed; how­ev­er, nei­ther Kit­co Met­als Inc. nor the author can guar­an­tee such accu­ra­cy. This arti­cle is strict­ly for infor­ma­tion­al pur­pos­es only. It is not a solic­i­ta­tion to make any exchange in com­modi­ties, secu­ri­ties or oth­er finan­cial instru­ments. Kit­co Met­als Inc. and the author of this arti­cle do not accept cul­pa­bil­i­ty for loss­es and/ or dam­ages aris­ing from the use of this publication. 

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