Crypto Ban: Uzbekistan Blocks Access to FTX and Binance – Here’s Why

Authorities in Uzbekistan are now cracking down on online crypto trading platforms that operate outside the nation and are not registered with the authorities.

The authorities have mandated that platforms have a license to be able to offer digital currency services to users. However, they have observed in recent weeks that many exchanges are offering their services without their consent or permissions.

Among the crypto exchanges that have blocked access are Binance and FTX, and the directive is an attempt to guarantee that companies in the field comply with government regulations.

Binance’s head of operations in Eastern Europe Gleb Kostarev has acknowledged that the exchange’s website has been unavailable to Uzbek users since Tuesday. As he said, the ban extends to Huobi, FTX, Bybit and others.

Uzbekistan has only licensed one exchange so far. In January 2020, Uznex was introduced by the South Korean company Kobea Group.

Uzbekistan says you follow our crypto laws

The government is now working on a regulatory structure for the bitcoin market, with one of the main goals being to ensure that the activity is carried out “in accordance with statutory actions.”

The National Agency of Prospective Projects (NAPP) in Uzbekistan has observed an increase in the number of unlicensed internet platforms offering virtual currency-related services to Uzbek citizens.

A presidential directive mandates that people and local businesses only use government-licensed digital asset exchanges in the Central Asian nation.

Uzbekistan is serious about its crypto laws. Image: Blockchain News

These unregistered activities, according to the regulatory agency, encourage the trading of cryptocurrencies and solicit personal information without complying with the need for their servers to be installed in the country.

In a statement, the government stated:

“Currently, the activities of various electronic platforms that provide services to citizens of the Republic of Uzbekistan by trading and (or) exchanging crypto-assets without the necessary license for the operation of service providers on the territory of the nation are intensifying.”

Uzbekistan to Foreign Crypto Exchanges: Get a License First

The decision reflects the ongoing efforts of the Government of Uzbekistan to improve the institutional and regulatory framework in the cryptocurrency field.

Uzbekistan has regulated these asset types and made significant efforts to modernize the framework since 2018. In order to operate in the country, crypto exchanges, mining companies and custody providers are required to obtain licenses.

As of January 1, 2023, only national or licensed platforms can be used for trading by nationals of the country. Until then, it is unclear whether citizens can participate in foreign exchanges.

Globally, governments are cracking down on the centralized parts of the digital currency sector. Authorities have targeted a number of cryptocurrency exchanges in an attempt to exert control over the fast-growing asset class.

Crypto total market cap at $1.1 trillion on the daily chart | Source: TradingView.com

Featured image from What’s My IP Address, Chart from TradingView.com