Cryptocurrency trading platforms headquartered outside the country and not registered under its laws.
A presidential proclamation requires citizens and local businesses to exclusively use digital asset exchanges licensed by the Central Asian nation's government.
The National Agency of Perspective Projects (NAPP) of Uzbekistan has noticed an increase in the number of online platforms offering crypto-related services to Uzbeks without a license. According to the regulatory body, these facilitate cryptocurrency trading and request personal information without meeting a need to have their servers placed in the nation.
According to a recent statement, such platforms have no legal responsibility for carrying out operations with crypto assets, cannot guarantee the authenticity of transactions, and cannot ensure the proper storage and protection of personal data of citizens of the Republic of Uzbekistan. The regulator has limited access to their domains in light of these results.
The announcement emphasizes that the Uzbek government has made constant efforts to enhance the regulatory and institutional environment in the cryptocurrency field. A decree signed by President Shavkat Mirziyoyev in 2018 outlined the forms of digital asset-related commercial operations, such as cryptocurrency mining and the supply of services connected to their circulation.
Mining pools, cryptocurrency exchanges, and depositories, as well as other crypto companies that offer individuals or legal entities services for the purchase, sale, exchange, storage, issuance, placement, and management of crypto assets, are examples of providers whose activities are subject to licensing.
Regulations passed in April allow Uzbeks and enterprises headquartered in their nation to purchase, trade, and exchange cryptocurrencies solely on local platforms starting from January 1, 2023. NAPP now emphasizes that this does not provide local enterprises or persons the authority to make such transactions on overseas platforms prior to that date.
So far, Uzbekistan has only approved one cryptocurrency exchange. Uznex was introduced in January 2020 by the South Korean company Kobea Group. Last November, the National Agency of Perspective Projects issued a warning to Uzbek crypto traders to avoid unregulated exchanges, leaving them with only one legal choice.
The agency has also informed all residents of the country that they can perform crypto transactions with the native currency, the som, and sell crypto assets to non-residents for foreign fiat currency on registered exchanges. The NAPP advises Uzbek residents not to utilize online platforms that do not have a license to operate in the republic and to report them to law authorities.
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