Bybit Receives Preliminary Approval In Kazakhstan To Operate As Crypto Custody Provider

Cryptocurrency exchange Bybit has received "in-principle" approval from regulators in Kazakhstan to operate in the country.

Bybit is the 3rd most visited and 10th largest crypto exchange by volume.

Kazakhstan's Astana Financial Services Authority (AFSA) issued the approval Monday to allow Bybit to operate as a digital asset trading facility and custody services provider at the Astana financial center.

''We are delighted to receive an in-principle approval from AFSA," Bybit CEO and co-founder Ben Zhou said in a statement, adding "we believe in the promising potential of the Commonwealth of Independent States and are eager to open up our world-class trading platform from crypto enthusiasts in the region," as per Finance Magnates.

Zhou affirmed to comply with local regulations in Kazakhstan after Bybit was recently lambasted by Japanese regulators for operating in the country without registration.

"It has always been our primary objective to operate our business in compliance with relevant rules and regulations," the Bybit CEO added, according to CoinTelegraph.

Last month, Japan's Financial Services Agency said Bybit and a number of other foreign cryptocurrency exchanges were operating in the country without proper registration in violation of the fund settlement laws.

As per the "in-principle" approval, Bybit is required to get permanent authorization to start servicing locals after the completion of the application process. The crypto exchange has been working on expanding its service offerings in the country over the past few months.

Last month, Bybit announced its new headquarters in Dubai would strengthen its presence in the Middle East and North Africa (MENA) region, and enable the company to facilitate entrepreneurial activities in the Web 3 space.

"Bybit is also strengthening our roots in the city and looking forward to helping cultivate local talent through a series of educational and innovative initiatives, starting with hackathons and workshops at local universities," Zhou said at the time.

In March, the Dubai-based exchange partnered with Mastercard to introduce a new debit card for cryptocurrency payments. It came after the company announced it will cease accepting bank transactions in U.S. dollars.

Meanwhile, Kazakhstan is steadily developing itself as a regional hub for crypto and blockchain. The country is overseeing the pilot phase of digital currency development, as it aims to embrace innovation in the financial sector. In February, Kazakhstan's officials announced a new 75% revenue mandate for crypto mining.

The country also revealed successfully collecting $7 million in crypto taxes for 2022 in a show of commitment to combat tax evasion. Kazakhstan has been struggling with electricity shortages after Bitcoin miners flocked to the country over the past few years, pressurizing the grid infrastructure.

Kazakhstan is also seeking to regulate digital assets exchanges in the aftermath of the FTX collapse. Earlier this year, local crypto regulators proposed new requirements for regulated digital asset exchange platforms with the aim of safekeeping and segregation of customers' assets.

"Overall, the regulatory framework is at the early stages of the development and there is a need to observe how the measures of the DATF (Digital Asset Trading Facility) framework will work in practice," AFSA said about the proposals.