The Financial Market Regulation and Supervision Service of the Kyrgyz Republic announced a set of legislative amendments aimed at increasing transparency, strengthening oversight mechanisms, and minimizing money laundering risks in the crypto sector. The changes were enshrined in a Cabinet of Ministers resolution.
Strengthening the fight against shadow activity and risks
The amendments significantly tighten requirements for operators of virtual asset trading and exchanges, bringing regulations into line with international standards, including FATF recommendations.
Key anti-money laundering measures (AML/KYT).
- The use of anonymous wallets, NFTs, prepaid foreign cards, transactions with online casinos, and high-risk assets is prohibited.
- Mandatory AML/KYT (counter-money laundering) verification of transactions through providers designated by the regulator is introduced.
- Mandatory identification and verification of clients of virtual asset service providers, including remotely, is being introduced.
- All key officials of service providers (directors, accountants, compliance officers) must be approved by the regulator and must not be on sanctions lists.
Furthermore, residents of the Kyrgyz Republic are now prohibited from conducting virtual asset transactions through unlicensed providers.
Ban on unsecured tokens and guarantees for investors
To strengthen investor confidence and enhance the reliability of digital instruments, the resolution establishes strict rules for securing virtual assets.
- A ban on the issuance of unsecured virtual assets is being introduced. Only assets backed by reliable collateral are subject to registration.
- Collateral may include government securities, shares of listed companies, mineral development rights, gold, or cash.
- An independent assessment of the collateral assets, mandatory registration of the collateral, and the appointment of an independent manager to protect the interests of asset holders in the event of an issuer’s default have been introduced.
Mining systematization and RUNEXKG platform
To streamline cryptocurrency miners’ activities, the concept of a Unified State System of Collective Mining is being introduced. Mining results are subject to mandatory sale through licensed operators.
Monitoring and analysis of the crypto sector is carried out through the RUNEXKG digital platform, launched in December 2024. RUNEXKG is a state ecosystem for the registration, monitoring, and AML/KYC analysis of all virtual asset service providers in the Kyrgyz Republic.
The new rules also establish additional guarantees for client rights, including mandatory retention of information on client risk assessments for at least five years.
