Russian users are welcomed by crypto exchanges in Kazakhstan, but there is a catch
Some cryptocurrency exchanges continue to accept Russian citizens despite the latest Western sanctions against Russia, but not without certain restrictions.
In late September, Kazakhstan’s President Kassym-Jomart Tokayev witnessed the nation’s first regulated fiat-to-crypto purchase by a local commercial bank, Eurasian Bank.
The transaction involved a local crypto exchange called Intebix, which allows retail customers to buy crypto with the local currency, the Kazakh tenge (KZT).
Intebix is not limited to Kazakhstan citizens, and the crypto exchange is willing to serve foreigners coming to the country, according to Intebix co-founder and CEO Talgat Dossanov. He emphasized that Intebix’s crypto transactions are only available to cardholders from one of Kazakhstan’s banks.
“Although foreign nationals are more than welcome at Intebix, they will need a local bank card to enjoy the crypto-to-fiat transactions,” Dossanov said in an interview with Cointelegraph.
The CEO noted that Intebix only supports crypto transactions for verified customers, while local banks carefully check each potential client to see if they are sanctioned. Dossanov stated:
“Russian citizens who are not on sanctions lists are welcome at Intebix, although they must pass a thorough compliance check and open an account in a local bank to enjoy the crypto-to-fiat transactions.”
Kazakhstan became one of the main destinations for Russian citizens trying to avoid being called up to fight in Ukraine after Russian President Vladimir Putin announced a partial mobilization in mid-September. About 200,000 Russians fleeing mobilization are said to have entered Kazakhstan as of 6 October.
Major banks in Kazakhstan, including Halyk Bank, have reportedly suspended the use of Russia’s Mir payment system amid sanctions warnings from the US Treasury Department.
Apart from boycotting Mir, some banks in Kazakhstan also stopped accepting payments from local branches of major Russian banks such as Sberbank, prompting them to sell their local operations.
Despite accepting foreigners, the crypto exchange Intebix is still obliged to comply with sanctions in its own way.
“Since we are a regulated exchange, we must comply with the requirements set by our regulators. We are constantly monitoring the current situation to ensure that we are operating within the regulatory framework, Dossanov said.
The CEO stressed that Intebix does not restrict all Russian citizens on its platform because the firm is regulated by the Astana International Financial Center (AIFC). On the other hand, Biteeu, the European branch of Intebix, no longer onboard Russians in line with EU sanctions.
Dossanov founded Biteeu in 2019 together with Kazakh businessman Shukhrat Ibragimov, the son of local oligarch Alijan Ibragimov. Biteeu co-founder Ibragimov has been a board member of Eurasian Bank since 2017. He also became chairman of local mining giant and commodity supplier Eurasian Resources Group (ERG) after his father – a major ERG shareholder and co-founder – died in February 2021.
According to Dossanov, Ibragimov is the only investor in Biteeu and Intebix. “The reason Eurasian Bank is the first crypto-friendly bank in the region is mainly because of Ibragimov. He believes in crypto and sees new opportunities,” the executive said.
Related: Kazakhstan grants Binance a permanent license to provide digital asset services
Kazakhstan has emerged as one of the world’s largest crypto mining hubs. The country has actively adopted guidelines to promote crypto adoption, officially authorizing crypto exchanges to open bank accounts in June 2022.
Binance, one of the world’s largest crypto exchanges, received in-principle approval to operate as a digital trading facility and offer custody services in the AIFC in August. On October 19, Binance reportedly appointed Zhaslan Madiyev, a former deputy minister at the Ministry of Digital Development, as director of Binance Kazakhstan.
