Kazakh association takes initiative to create rules of the game on crypto-currency market in EAEU

ALMATY – Organisers of the Feb. 16 International Crypto Conference 2018 in Almaty said their goal was to become a “translator of the Eurasian view on the problems of the crypto-currency industry development.” Chairman of the Board of the Kazakhstan Association of Blockchain and Crypto-currency Yesset Butin stated this is especially important in the context of the functioning of the Common Economic Space, as well as in the framework of the Customs Union.

2191db5da42e3e9f2534a5a5891707f233

“It is necessary to take into account that as the integration of blockchain and crypto-currency technologies into the global economic structure increases, we will be witnessing (it) and it perhaps already happens today, as the new economic and legal system with an unprecedented degree of automation and decentralisation is being built,” said Butin. “And despite the fact that crypto-currencies by nature of their ideology are not the subject to centralised control, it is necessary to recognise the fact that the legal regulation of related processes is an inevitable reality requirement.”

The agenda of the conference included an important issue of regulation of the crypto-currency industry. The number of discussions around this subject has been growing rapidly at various levels for several years. The definition of the legal status of crypto-currencies, the transparency and feasibility of ICO procedures and the work of so-called mining centres have been widely discussed. The regulation of crypto-currency markets in different countries is subject to constant changes and adjustments.

Each Central Bank has its own approach to the issue, from de facto recognition to a total ban on such activities. Many governments have not yet finalised the clear position on legal regulation of activities related to the crypto-currency industry. In fact, crypto-currency in many jurisdictions finds itself in a legal vacuum or in the so-called gray zone.

At the forum, a proposal was made to set up the coordinated joint initiative within the framework of the common digital transformation programme of the EAEU member states. These common efforts are needed in order to introduce harmonised standards, unify regulatory requirements to the legislation and to promote the full-fledged digital transport corridors.

In this regard, the participants of the Crypto Conference 2018 adopted an address to the governments and central banks of the member states of the Eurasian Economic Union (EAEU) which reads as follows:

“We, as participants of the Crypto Conference 2018, consider it necessary for our governments to regulate the crypto industry and we call for the urgent adoption of legislative norms with the main ultimate goal – to protect the interests of all market players from unfair actions of any third parties, as well as to eliminate the potential use of crypto-currencies as a tool for servicing illegal businesses, money laundering and terrorist activities financing.

At the same time, the approach to regulation and the legislation adopted should create favourable conditions, which promote the development of new technologies and attract investments in this industry.

We believe it is necessary for the crypto industry laws and regulations of our countries to be harmonised with each other and take into account the interests of all market makers. We should develop a common terminology, consolidate the requirements, systematise the concepts and agree on common approaches to the regulation of the crypto industry. This will make such harmonisation and legislation development the most effective.

In this regard, we would like to address the national regulators with a request to treat crypto-industry regulation not so much as the means of control and oversight, but more so as a way to create conditions conducive to the development of technologies and investment attraction in the sector. Legal regulation will make the crypto-currency industry more predictable and stable, and most importantly will protect people from fraud, which unfortunate abundance in nowadays crypto-currency markets is not questioned by anyone.

An attempt to excessively control this decentralised system, which is by nature uncontrollable, will have a negative impact on market participants. Overly strict regulation can harm the development of this new market, drive its participants underground, and eventually lead to capital flight.”

The proposals formulated in the document are limited to the creation of an advisory council to develop a coordinated position on the development, justification and expert assessment of draft laws for crypto industry regulation. Taking the initiative to develop transparent legislation in the field of crypto-currency circulation, the participants of the Almaty conference called on government agencies to join the process.