Uzbekistan puts a curb on unlicensed crypto-exchanges, urges citizens to be vigilant

The Uzbekistan government has been working towards stopping crypto exchanges from operating without authorization in the country. In a recent circular, the regulatory agencies identified half a dozen exchanges which “offer citizens to exchange, sell or purchase crypto-assets.”

Regulators alleged that the exchanges were providing services without being based or registered in the country. The alert list includes platforms such as webmoneytashkent.com, wmztashkent.com, and bitcointashkent.com.

Additionally, the release pointed out the use of social media platforms, like Telegram, to run anonymous groups. It stated,

“The Agency urges citizens to be as vigilant as possible, and not use services of such platforms, so as not to become victims of fraud.”

The statement also alerted the unauthorized crypto exchanges that activities in the digital economy are subject to licensing.

The country made several changes to its legal framework since 2018. Earlier that year, the President of Uzbekistan signed a decree to facilitate crypto transactions, exchange, mining, taxation, and licensing of digital assets and their providers. Crypto exchanges must obtain a license before starting operations.

Additionally, the electronic system of the crypto-exchange server should be located within the jurisdiction to offer services to its residents. However, after 2019, the residents of Uzbekistan were barred from buying digital currencies and could only sell them under the rules.

Last month, the Deputy Chairman of the country’s central bank, Behzod Khamraev had commented that the national currency in circulation is worth 28 trillion soʻm. He added that the currency is backed by central bank assets. In contrast, he added,

“You can even see an inscription on the obligations of the regulator on banknotes, and the cryptocurrency is not backed by anything.”

He had also gone on to say that cryptocurrencies will never be equal to currencies like the dollar, euro, yen, ruble while adding that,

“It is considered speculative.”