Tashkent, Uzbekistan (UzDaily.com) -- National Agency for Prospective Projects of the Republic of Uzbekistan by the Law of the Republic of Uzbekistan “On licensing, permitting and notification procedures” and the resolution of the President of the Republic of Uzbekistan “On the organization of activities of the National Agency for Prospective Projects of the Republic of Uzbekistan”, determined as the authorized body for the development of the sphere of circulation of crypto-assets, licensing of activities and permitting procedures in this area.

According to the Regulations on the procedure for licensing the activities of service providers in the field of circulation of crypto-assets, licensing requirements and conditions are determined for the activities of service providers in the field of circulation of crypto-assets in the territory Republic of Uzbekistan.

In pursuance of the Law, the Agency inspected the activities of international crypto exchanges and other electronic platforms, including the Binance crypto exchange, for compliance with licensing requirements and conditions in the field of crypto-asset turnover.

The Agency identified the following violations of legislation:

– there are reliably confirmed facts of providing services to citizens of the Republic of Uzbekistan for transactions with crypto-assets;

– on the Binance platform, transactions are carried out with anonymous crypto-assets, as well as with crypto-assets and funds obtained by criminal means (theft, fraud, etc.);

– the company is not a legal entity – a resident of the Republic of Uzbekistan;

– there is no electronic platform hosted on servers located on the territory of the Republic of Uzbekistan;

– the requirements of the legislative acts of the Republic of Uzbekistan in the field of circulation of crypto-assets, anti-money laundering, anti-terrorist financing and financing of the proliferation of weapons of mass destruction, as well as the storage and use of personal data are not observed;

– there is no information regarding the exclusion from management and participation in the authorized capital (capital) of service providers of persons specified in subparagraph “h)” of paragraph 9 of the Regulations, as well as companies registered in offshore zones;

– there is no formed authorized fund (capital), part of which must be reserved in a separate account in a commercial bank of the Republic of Uzbekistan.

Based on the identified violations, a report was drawn up to verify compliance with licensing requirements and conditions in the field of crypto-asset turnover, which was sent to the Binance crypto exchange for review and taking measures to eliminate violations.

The Binance crypto exchange did not take appropriate measures aimed at organizing activities, including obtaining the appropriate service provider license, in the territory of the Republic of Uzbekistan.

In this regard, the Agency, in accordance with the Law, made a decision to impose a fine in the amount of 300 basic calculation units, which was sent to the Binance crypto exchange and the regulator of the jurisdiction in which the company is registered.

According to Article 55 of the Law “On Licensing, Permitting and Notification Procedures”, within a month from the date of sending the decision to impose a fine, the offender may voluntarily pay the amount of the fine provided for in this decision.

If the offender fails to pay the fine voluntarily, the authorized body, within five working days in the prescribed manner, applies to the court to collect the fine.

Along with this, the legislation of the Republic of Uzbekistan provides for administrative and criminal liability measures for engaging in activities without a license.

The Agency reminds citizens of the Republic of Uzbekistan that in accordance with subparagraph “d” of paragraph 3 of the resolution of the President of the Republic of Uzbekistan “On measures to develop the digital economy and the sphere of circulation of crypto-assets in the Republic of Uzbekistan” from 1 January 2023 year, citizens and legal entities of the Republic of Uzbekistan can carry out transactions for the purchase, sale and (or) exchange of crypto-assets exclusively through national service providers in the manner established by legislative acts.