BetterNews #1: AIFC regulation on cryptoexchanges

BetterTokens Overview

On July 11, 2018, Astana International Financial Centre (AIFC) enacted new rules related to cryptocurrency (

The main difference of the regulations proposed by AIFC in comparison with other jurisdictions is that the local regulator (Astana Financial Services Authority or AFSA) does not intend to establish a legislative framework for the use of blockchain technology or crypto economy, rather focusing only on one element — regulation of cryptoexchanges.

Below we summarized main provisions of the enacted rules. We also made a comparison with regulations proposed in other CIS countries — Belarus and Russia.

Introduction of AFSA “crypto” Glossary

The glossary contains definition of Private E-currency (a name given to cryptocurrency by the regulator), which is a digital representation of value with following characteristics:

1. It can be traded and function as:

  • Medium of exchange;
  • Unit of account;
  • Store of value.

2. It can be exchanged for fiat and vice versa, but is not issued nor guaranteed by the government of any jurisdiction;

3. It fulfils mentioned functions only by the agreement within the community of users; and

4. It is different from fiat currency and e-money.

Private E-currency can be centralized or decentralized depending on whether or not it has a central administrating or supervising authority, gives rise to claims to its issuer or provides contractual right to receive fiat or another financial asset.

AFSA does not distinguish between cryptocurrencies and tokens.

The glossary also defines fiat currency, e-money, digital wallet and its types (hot and cold), smart-contracts and mining.

The main focus of the rules is the definition of Private E-currency business, which includes trading facilities and custodians of Private E-currencies. Both are considered activities subject to AFSA regulation.

Private E-currency trading facility

This is the name that AFSA called cryptoexchanges.

Operating a cryptoexchange in AIFC is subject to licensing and means operating a facility which functions regularly and brings together multiple parties (whether as principal or agent) with a view to the entering into contracts to buy, sell or exchange cryptocurrency for fiat or for another cryptocurrency.

Cryptoexchanges fall into the term that already existed in AIFC defined as Authorised Market Institution (which in addition includes investment exchanges and clearing houses).

There are two type of rules that will apply to cryptoexchanges in AIFC:

  • Certain pre-existing rules applicable to other Authorised Market Institutions (for purposes of this post we will not be focusing on those);
  • New set of rules specifically set for cryptoexchanges. Those include transparency, technology resources, governance, COB and AML compliance, disclosure of data relating to the quality of execution of transactions and establishment of internal rules (business rules, admission to trading rules and membership rules) which have to be available for public consultations and approved by AFSA.

Admission to trading

AFSA states that the rules of cryptoexchanges must ensure that cryptocurrency admitted to trading is capable of being traded in a fair, orderly and efficient manner. This statement does not suggest any indicia of what would be considered as “fair, orderly and efficient manner”, which opens doors to uncertainty that the operators may face when trying to comply with this requirement, especially taking account specifics of crypto trading.

Admission of an asset to trading is subject to application and approval by AFSA. Assets that have been admitted are subject to periodical review of compliance with the trading rules and may be suspended from trading upon certain conditions.

Other rules

Other relevant rules include transparency in relation to pricing and trading transactions, cooperation with AFSA, and additional requirements on technology resources, such as cyber-security policy, technology governance, trading controls and others.

Comparison with other jurisdictions

CIS countries: Russia and Belarus

As mentioned in the beginning of the post, AIFC intends to regulate only cryptoexchange business. On the other hand, Belarus and Russia aim at establishing a legislative framework for different industry participants.


In its recently enacted regulation Belarus sets out rules for blockchain transactions, token issuance and mining operations. Many provisions of its regulation are unique in terms of international practice, including the existence of accounting approach for crypto assets officially formalized by Ministry of Finance.

You can find more detailed information on regulation in Belarus in our separate overview:


Legislative acts that aim to regulate crypto related matters are still in draft form in Russia and are being discussed by competent authorities. Despite the fact that proposed rules intend to follow the example of Belarus rather than AIFC by trying to establish a framework regulation, the bills are not yet consistent with each other and are unable to establish a clear unified set of rules that would allow operational activities in Russian crypto market.

You can find more detailed information on regulation in Russia in our separate overview:

Non-CIS countries

It would be fair to say that the general trend for now amongst countries that have adapted crypto related regulations focuses on creating a framework for blockchain and crypto industry. The most recent example of this trend is Malta.

AIFC adapted a different approach by focusing its effort on a very specific area of the industry. The assessment of this effort will depend on whether or not AIFC will be able to provide an operational framework for cryptoexchanges to conduct their business, which together with enacted rules would be the main factor to attract crypto trading business to AIFC.