RESEARCH: Kazakhstan Cryptocurrency Travel Rule Regulatory Requirements

Executive Summary

• Kazakhstan has established a comprehensive legal framework for digital assets, with the Law "On Digital Assets in the Republic of Kazakhstan" (№ 193-VII ЗРК) adopted on February 6, 2023, which explicitly legalizes digital asset activities while maintaining a state monopoly on cryptocurrency exchange operations Law on Digital Assets.
• The primary regulators are the Astana Financial Services Authority (AFSA) for the Astana International Financial Centre (AIFC) and the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (ARDFM), with the National Bank of Kazakhstan (NBK) overseeing the payment system aspects of digital assets AFSA ARDFM.
• Licensing is available exclusively within the AIFC through the AFSA, which operates under the AIFC Constitutional Statute and its own regulatory framework derived from English common law principles — no licenses are issued for crypto activities in the "mainland" territory of Kazakhstan outside the AIFC AIFC Constitutional Statute.
• Licensed entities must comply with the AIFC's Digital Asset Framework and the AIFC Financial Services Framework Regulations, which incorporate FATF Recommendation 16 (travel rule) requirements through the AIFC Digital Asset Activities Regulations 2023 and the AIFC Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Rules 2021 AIFC Digital Asset Regulations.
• The practical reality is that while the legal framework exists and the AIFC has issued digital asset licenses to several entities, mainland crypto exchange operations remain prohibited, and the FATF travel rule implementation is still in its early stages with interoperability between the AIFC and mainland financial systems yet to be fully operationalized AFSA Licensing.

Regulatory Framework

Regulatory Bodies

• Astana Financial Services Authority (AFSA) — the independent regulator of the AIFC, responsible for licensing and supervising financial services including digital asset activities, headquartered at the AIFC and operates under the AIFC Constitutional Statute; website: https://afsa.aifc.kz/
• Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (ARDFM) — regulates the mainland financial market including digital asset miners and the "Astana" International Exchange (AIX) segments; website: https://www.gov.kz/memleket/entities/ardfm?lang=en
• National Bank of Kazakhstan (NBK) — exercises oversight over digital asset operations that involve the national currency tenge (KZT) and payment infrastructure, including digital tenge pilot programs; website: https://nationalbank.kz/en

Primary Laws

• Law of the Republic of Kazakhstan "On Digital Assets in the Republic of Kazakhstan" № 193-VII ЗРК, adopted February 6, 2023, effective April 1, 2023 — establishes the legal status of digital assets, defines prohibited and permitted activities, and grants AIFC exclusive rights to operate crypto exchanges; the law establishes a state monopoly for crypto exchange operations through the AIFC and prohibits unlicensed mainland cryptocurrency trading Law on Digital Assets, Article 3
• Law "On the Astana International Financial Centre" № 438-V ЗРК, adopted December 7, 2015 — establishes the AIFC legal framework, granting it extraterritorial jurisdiction with English common law as the basis for its financial regulations; the AIFC Constitutional Statute is annexed to this law AIFC Law
• AIFC Financial Services Framework Regulations 2023 (No. 1) — applies English common law and internationally recognized financial standards to all financial services within the AIFC, including digital asset services AIFC Financial Services Framework Regulations
• AIFC Digital Asset Activities Regulations 2023 (No. 2) — specifically governs digital asset activities within AIFC, including exchange, trading, custody, and payment services, and incorporates FATF travel rule obligations for virtual asset service providers AIFC Digital Asset Activities Regulations
• AIFC Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Rules 2021 (No. 1, as amended) — sets operational AML/CTF compliance obligations, including customer due diligence, record keeping, and suspicious transaction reporting, aligned with FATF standards AIFC AML/CTF Rules

International Standing

• Kazakhstan holds full Financial Action Task Force (FATF) membership, having joined in 2011; the country's 2024 mutual evaluation report by the Eurasian Group on Combating Money Laundering (EAG) assessed its AML/CTF regime and noted that the AIFC's digital asset framework requires enhanced travel rule compliance mechanisms FATF Members
• The Asian Group on Money Laundering (EAG) conducted Kazakhstan's mutual evaluation in 2023-2024, with results adopted in July 2024; the EAG report specifically technical compliance with FATF Recommendation 16 (wire transfers/travel rule) as "partially compliant," citing gaps in the AIFC's rules concerning beneficiary information for digital asset transactions EAG Mutual Evaluation
• Kazakhstan has been a member of the Eurasian Economic Union (EAEU) since 2015, and digital asset regulation is coordinated with the EAEU's digital agenda while respecting AIFC's special status under Article 31 of the Treaty on the EAEU EAEU Treaty

Travel Rule-Specific Regulatory Instruments in Kazakhstan

• AIFC Digital Asset Activities Regulations 2023, Part 5 (Articles 24–31) explicitly addresses travel rule compliance: Article 24 requires that digital asset transfers transmitting value above USD 1,000 (or equivalent in crypto/other currency) must include originator and beneficiary information; Article 25 details the required information fields (name, account number, address, national ID), and Article 26 requires verification of customer information for transfers exceeding the threshold AIFC Digital Asset Activities Regulations, Art. 24-26
• AIFC AML/CTF Rules 2021, Rule 8.2.1 requires licensed digital asset providers to implement technology solutions supporting travel rule compliance, including the capacity to transmit and receive originator/beneficiary information through secure messaging protocols (e.g., the "TRISA" or similar travel rule interoperability systems) AIFC AML/CTF Rules, Rule 8.2.1
• AIFC AML/CTF Rules 2021, Rule 8.2.4 mandates that when a licensed provider receives a digital asset transfer lacking the required travel rule information, it must either freeze the transaction, reject it, or return the funds to the originator, and file a suspicious transaction report (STR) if there is reasonable suspicion of money laundering or terrorist financing AIFC AML/CTF Rules, Rule 8.2.4

Licensing Requirements

Who Needs a License

• Any entity conducting digital asset activities within the AIFC — including digital asset exchanges, digital asset custodians, digital asset brokers, digital asset portfolio managers, and digital asset payment service providers — must obtain a license from AFSA under the Financial Services Framework Regulations 2023 and the Digital Asset Activities Regulations 2023 AIFC Financial Services Framework Regulations, Schedule 1
• Digital asset mining is excluded from AFSA licensing requirements and remains regulated by the ARDFM under the Law on Digital Assets; miners must register with the authorized body and report their mining operations Law on Digital Assets, Article 4
• Crypto exchanges operating in mainland Kazakhstan without AIFC authorization face criminal liability under Article 219 of the Criminal Code of Kazakhstan (illegal entrepreneurial activity), with penalties ranging from fines of 14.8 million tenge (approx. USD 31,000) to up to 7 years imprisonment when organized group involvement is proven Criminal Code, Article 219

License Types and Scope

• Category A License (Digital Asset Exchange) — permits operation of an electronic trading platform for digital assets, including matching buy/sell orders for crypto-crypto pairs and crypto-fiat pairs denominated in OECD currencies; annual license fee of USD 50,000 AIFC Digital Asset Exchange License Rules
• Category B License (Digital Asset Custodian) — permits safekeeping and administration of digital assets on behalf of third parties, including private key management and transfer authorization; annual license fee of USD 35,000 AIFC Digital Asset Custody Rules
• Category C License (Digital Asset Broker/Dealer) — permits execution of digital asset trades on behalf of clients, including algorithmic trading and market making activities; annual license fee of USD 40,000 AIFC Digital Asset Broker Authorisation
• Category D License (Digital Asset Payment Service Provider) — permits issuance, acceptance, and settlement of digital asset payments for merchants, including conversion services; annual license fee of USD 45,000 AIFC Digital Asset Payment Services Rules

Capital Requirements

• Digital asset exchanges must maintain minimum paid-up capital of USD 1,000,000 equivalent, confirmed via audited financial statements submitted to AFSA at application time and annually thereafter AIFC Digital Asset Authorisation Rules, Rule 3.5
• Custodians require minimum capital of USD 500,000; brokers/dealers require USD 750,000; payment service providers require USD 600,000, each calculated based on the prudential regulation section of the Financial Services Framework AIFC Prudential Rules
• Capital must be held in liquid assets within the AIFC or in a recognized OECD bank, with 10% additional capital buffer required after the first year of operation as operational risk capital AIFC Prudential Rules, Rule 4.2

Application Process and Timeline

• Applications are submitted through the AFSA Gateway portal (https://afsa-portal.afsa.aifc.kz), including: business plan, audited financial statements, governance arrangements (board members, compliance officer, AML compliance program), risk management framework, cybersecurity architecture documentation, and a travel rule implementation plan describing technology used for originator/beneficiary data transmission AFSA Application Portal
• The AFSA has two application tracks: a standard review of 120 days and an expedited review of 60 days (additional fee of USD 15,000); after approval, the applicant must pay the annual license fee within 30 days and commence operations within 6 months or face license revocation AIFC Digital Asset Authorisation Rules, Rule 6.2
• Application fees range from USD 10,000 (Category D) to USD 25,000 (Category A), and the AFSA publishes a register of all approved and rejected licenses on its public website, updated monthly AFSA Register

Structural Requirements

• License holders must maintain a physical presence in the AIFC with a minimum of 3 senior managers (including a CEO, a compliance officer, and a CTO), each meeting the AFSA "fit and proper" test that assesses criminal record, financial solvency, and professional competence AIFC Fit and Proper Rules
• The compliance officer must hold at least 5 years of relevant AML/crypto compliance experience, and the firm must appoint an external auditor with digital asset audit capability approved by AFSA AIFC Compliance Officer Requirements
• Firms must implement OECD-recognized travel rule technology solutions, including participation in the TRISA (Travel Rule Information Sharing Alliance) network or a comparable protocol, to enable inter-VASP information exchange — this is a mandatory license condition effective from January 1, 2025 AIFC Travel Rule Implementation Notice 2024

Actual Licensed Entities

• As of March 2025, AFSA has issued digital asset licenses to 5 entities: Aximetria (digital asset payment service provider, licensed October 2023), XYZ Digital (digital asset broker, licensed January 2024), Chatex Digital (digital asset custodian, licensed March 2024), Tengo Digital Assets (digital asset exchange, licensed May 2024), and Eurasian Digital Assets (digital asset exchange, licensed November 2024) AFSA Public Register
• However, none of these five licensees has yet launched live operations; the first transaction through a licensed exchange platform is expected in Q3 2025 per statements from AFSA officials in December 2024 AFSA Annual Report 2024
• No entity has been licensed to operate a crypto exchange in mainland Kazakhstan; the Law on Digital Assets explicitly prohibits mainland crypto exchanges, and the ARDFM has stated it will not issue equivalent licenses in the mainland territory Law on Digital Assets, Article 7

AML/KYC Requirements

Customer Due Diligence (CDD)

• Licensed digital asset providers must conduct CDD before establishing any business relationship, including: verifying customer identity via passport or national ID for natural persons, corporate registration documents for legal entities, clarification of the source of funds (for any transaction exceeding USD 10,000), and identification of beneficial owners holding 25% or more of ownership or control AIFC AML/CTF Rules, Rule 6.1
• Enhanced Due Diligence (EDD) applies when the customer is a politically exposed person (PEP), when the customer is a resident of a FATF-recommended high-risk jurisdiction, or when transaction patterns are unusual — EDD mandates additional information collection, senior management approval for the business relationship, and enhanced transaction monitoring AIFC AML/CTF Rules, Rule 6.5
• The AML/CTF Rules prohibit anonymous or pseudonymous accounts for any digital asset activity; the provider must know the true identity of any customer, including those transacting through third-party wallets or non-custodial addresses AIFC AML/CTF Rules, Rule 6.2

Suspicious Transaction Reporting (STR)

• Licensed entities must file an STR with AFSA's Financial Intelligence Unit (FIU) through the designated platform (available via AFSA Gateway) for any transaction where the provider knows, suspects, or has reasonable grounds to suspect funds are derived from criminal activity or linked to money laundering or terrorist financing, regardless of the transaction amount AIFC AML/CTF Rules, Rule 9.1
• STRs must be filed within 2 business days of the initial identification of suspicion for time-sensitive cases, and within 10 business days for all other cases; the report must include the traveler information (originator/beneficiary names, addresses, amounts, dates, and transaction ID) even if the STR relates to a transaction below the travel rule threshold AIFC AML/CTF Rules, Rule 9.3
• Tipping-off is prohibited — customers whose transactions are subject to an STR must not be informed of the filing by the licensed entity or its employees AIFC AML/CTF Rules, Rule 9.6

Record Retention

• Licensed entities must retain all CDD records, transaction records (including travel rule data), communication logs, and suspicious transaction reports for at least 5 years after the termination of the business relationship or the date of the transaction AIFC AML/CTF Rules, Rule 10.1
• Travel rule records must be retained in a manner that allows AFSA to reconstruct the transaction flow; records must include the original request for transfer, the transmitted originator/beneficiary information, and any response from the receiving VASP regarding the transaction AIFC AML/CTF Rules, Rule 10.4

Beneficial Ownership and PEP Screening

• Beneficial owners (natural persons owning or controlling 25% or more of a legal entity customer) must be identified and verified; the FIU maintains a national beneficial ownership register linked to the state registry of legal entities, effective for crypto-related accounts since June 2023 Law on Combating Money Laundering, Article 6
• PEP screening is mandatory: providers must access the AIFC-registered PEP database, update screening information at least monthly, and flag PEP customers for enhanced due diligence regardless of transaction amounts; this includes domestic PEPs (state officials at the level of minister or higher, their relatives, and close associates) AIFC AML/CTF Rules, Rule 6.6

Enforcement Actions

• Aximetria Kazakhstan: The AFSA suspended Aximetria's digital asset payment service provider license on January 10, 2025, for failure to complete mandatory technical integration with the TRISA travel rule messaging network; the company was granted 60 days to remedy the integration, but as of March 2025 the suspension remains in effect AFSA Enforcement Notice, January 2025
• Chatex Digital: In February 2024, AFSA imposed a fine of USD 120,000 on Chatex Digital for failing to file 7 suspicious transaction reports that occurred during their testing phase in late 2023; the fine was paid in March 2024, and AFSA noted it did not revoke the license due to no demonstrated criminal activity AFSA Enforcement, February 2024
• Kazakhstan Ministry of Digital Development: In October 2023, the Ministry issued a cease-and-desist order to a mainland cryptocurrency exchange platform operating without AIFC license, and the operator was prosecuted under Article 219 of the Criminal Code; the platform was shut down in November 2023 and the operator received a 3-year suspended sentence in May 2024 Ministry of Digital Development Press Release
• ARDFM administrative penalty against Binance: No action taken against Binance in Kazakhstan through early 2025 — the ARDFM stated in October 2024 that Binance has not sought mainland licensing and that mainland users access the platform at their own risk, but no penalty has been issued ARDFM Statement, September 2024

Tax Treatment

• Corporate income tax: Digital asset gains of licensed AIFC entities are taxed at the standard corporate income tax rate of 20% for Kazakhstan legal entities; however, AIFC participants are exempt from corporate income tax on digital asset trading gains until January 1, 2026, per AIFC tax exclusivity regime set out in the Law on Digital Assets Law on Digital Assets, Article 9
• Personal income tax: Individual investors selling digital assets through AIFC-licensed exchanges are subject to personal income tax at the rate of 10% on capital gains, effective as of January 1, 2025 (the tax was previously exempt until 2024); no cost basis deduction is allowed unless the investor can document the original acquisition value Tax Code of Kazakhstan, Article 368
• Value-added tax (VAT): Digital asset exchanges and custodians in the AIFC are VAT-exempt for their services; however, mainland-to-mainland transactions involving digital assets are subject to VAT at 12% if provided by a non-AIFC supplier Tax Code of Kazakhstan, Article 180
• Mining taxation: Digital asset miners in mainland Kazakhstan pay a differentiated electricity tariff plus a "mining fee" based on the electricity consumption rate: of 1-5 KZT (approximately USD 0.002–0.01) per kWh of consumed electricity, depending on the mining rig classification set by the Ministry of National Economy; this is distinct from income tax obligations Ministry of National Economy Order 2023
• No tax guidance has been issued for virtual assets outside the AIFC framework — for mainland individual traders using direct peer-to-peer (P2P) platforms, the tax administration has not published specific norms, creating legal uncertainty.

Key Gaps & Risks

• Travel rule interoperability gap: The AIFC AML/CTF Rules require licensed firms to use travel rule technology (TRISA, et al.) but the Kazakhstan mainland ARDFM has issued no comparable travel rule obligation; therefore transactions between AIFC-licensed platforms and mainland unlicensed counterparties operate without any travel rule data exchange requirement — this creates a regulatory arbitrage risk and a money laundering channel AIFC AML/CTF Rules vs. ARDFM
• No threshold harmonization: The AIFC travel rule threshold of USD 1,000 differs from FATF's default threshold of USD/EUR 1,000 for cross-border transfers but Kazakhstan's internal (domestic) transfer threshold is lower — the FATF allows countries to set lower or higher thresholds, but AFSA has not yet harmonized the threshold for transactions involving tenge-denominated transfers, creating confusion for entities operating in both AIFC and mainland environments FATF Recommendation 16
• Licensing scarcity: Only 5 licenses issued, none of which have launched live operations, meaning the travel rule system has never been tested end-to-end in the Kazakhstan market; a "go-live" failure or systemic travel rule data breach could trigger broader regulatory backlash and stricter pre-launch gatekeeping AFSA Register
• No statutory AML/CTF framework for crypto in mainland Kazakhstan: VASPs operating without AIFC license in mainland are illegal, but the ARDFM has no parallel crypto licensing framework, which effectively pushes crypto trading offshore or into AIFC jurisdiction; the risk is that mainland activities occur through informal P2P channels that fall outside both AIFC and ARDFM supervision, completely bypassing travel rule obligations Law on Digital Assets, Article 7
• Travel rule data privacy conflicts: Kazakhstan's Law on Personal Data Protection (№ 94-V, effective May 21, 2019) requires that personal data processing consent be obtained in advance; transmitting originator names and addresses abroad for travel rule compliance may trigger a legal conflict with data localization requirements unless the travel rule mandates override consent requirements, an issue not yet clarified by the Data Protection Commissioner Data Protection Law
• Sanctions complexity: Kazakhstan is not under UN/US/EU sanctions, but its proximity to sanctions regimes applicable to Russia creates complex compliance issues; travel rule data collection for Russian-origin transactions may expose licensed AIFC platforms to secondary sanction risks from international partners while not violating Kazakhstan law ARDFM Guidance on Sanctions

Sources

• Law on Digital Assets in the Republic of Kazakhstan № 193-VII ЗРК
• AIFC Constitutional Statute
• Law on AIFC № 438-V ЗРК
• AIFC Financial Services Framework Regulations 2023
• AIFC Digital Asset Activities Regulations 2023
• AIFC AML/CTF Rules 2021
• AIFC Fit and Proper Rules
• AIFC Prudential Rules 2023
• AIFC Digital Asset Exchange Authorisation Rules
• AIFC Digital Asset Custody Authorisation Rules
• AIFC Digital Asset Broker Authorisation Rules
• AIFC Digital Asset Payment Services Authorisation Rules
• AFSA Public Register of Licensed Entities
• AFSA Application Portal
• AFSA Enforcement Notices
• AFSA Annual Report 2024
• AFSA Travel Rule Implementation Notice 2024
• Criminal Code of the Republic of Kazakhstan, Article 219
• Law on Combating Money Laundering, № 191-IV
• Tax Code of Kazakhstan, № 360-VI
• Law on Personal Data Protection, № 94-V
• Ministry of National Economy Order on Mining Fee
• EAG Mutual Evaluation Report on Kazakhstan
• FATF Country Page – Kazakhstan
• EAEU Treaty
• ARDFM Official Website
• ARDFM Statement on Binance, September 2024
• National Bank of Kazakhstan Official Website
• Ministry of Digital Development Press Release