Uzbekistan Blocks Binance and FTX Over Unlicensed Trading

Key Takeaways:

  • Binance, FTX, Huobi, and Bybi-among exchanges that got blocked
  • From January 1, 2023, Uzbek citizens and companies are legally permitted to conduct transactions only with licensed cryptocurrency exchanges.
  • Crypto mining pools, exchanges, and custodians need a license to operate in the country.

Uzbekistan’s National Agency of Perspective Projects (NAPP) has restricted access to several large international crypto exchanges owing to unregistered trading.

NAPP’s latest statement acknowledges the rise in online platforms providing crypto-related services to Uzbekistanis without the necessary license. Under the latest announcement, Uzbekistan restricts access to cryptocurrency exchanges and over-the-counter brokers because the country’s regulations don’t allow citizens to trade crypto on foreign platforms.

Binance, FTX, and Huobi are some global exchanges affected by these announcements. Gleb Kostarev, Binance’s head of Eastern Europe, confirmed that the exchange’s website hasn’t been accessible for users in Uzbekistan since August 9. He added that Huobi, FTX, Bybit, and others were also blocked.

The regulatory body further adds that these platforms “do not bear any legal responsibility for carrying out operations with crypto assets, cannot guarantee the legitimacy of transactions, as well as the proper storage and confidentiality of the personal data of citizens of the Republic of Uzbekistan.” 

The crypto watchdog pointed out that from January 1, 2023, Uzbek citizens and companies are legally permitted to conduct transactions only with licensed cryptocurrency exchanges. NAAP added that it had not previously blocked international exchanges so as not to inconvenience citizens who had funds on them. But this “did not mean that citizens can freely trade on foreign platforms until January 1, 2023,” the statement reads.

The regulator body had further urged citizens not to use the services of online platforms that have not been licensed and reported them to law enforcement.NAAP’s move is backed by a 2018 law that mandated crypto mining pools, exchanges, custodians, and crypto shops to gain licenses to operate in the country.

In April, NAAP was tasked to implement the state policy in the crypto economy and ensure investors’ rights were protected. The body is responsible for introducing blockchain technologies to the public sector and combatting money laundering, terrorist financing, and weapons proliferation through cryptocurrencies. In June, the NAPP announced it would only allow companies using solar energy to mine cryptocurrencies in the country. 

Uzbekistan has had an up and down relationship with crypto in recent years. The Republic legalized crypto trading in 2018, but in late 2019 the government banned local residents from purchasing cryptocurrencies. Further, in November 2021, citizens were allowed to trade crypto assets for national currency on licensed domestic crypto exchanges, while non-residents were permitted to exchange digital coins for foreign fiat.

Saniya Raahath
Saniya Raahath

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