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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.”
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