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Uzbekistan warns citizens against unlicensed cryptocurrency exchanges

Sat 02 Oct 2021 ▪ 11h33 ▪ 3 min read — by James Taylor

The National Agency of Project Management under the President of Uzbekistan has identified a number of online platforms offering unauthorised cryptocurrency trading services. During an internet monitoring campaign, the Agency recorded an increase in the activity of such unauthorised digital asset exchanges.

Although not headquartered in the country, these companies offer Uzbekistani citizens the opportunity to buy, sell, and trade crypto assets. They are usually registered in other jurisdictions, with their offices located abroad. At the same time, they collect Uzbekistani residents’ personal information, according to a statement published on the Agency’s website.

Unlicensed exchanges blacklisted

Several online cryptocurrency exchanges for Uzbekistani residents, such as webmoneytashkent.com, wmztashkent.com, wm-torg.com, uzwmz.com, blockchainuz.combitcointashkent.com, have been blacklisted. According to the regulator, similar services are also offered via Telegram, but their providers often remain anonymous and can easily delete the channel at any given time.

Officials confirm that such platforms aren’t legally responsible for crypto transactions between various parties and can’t guarantee their legitimacy. Moreover, they can’t ensure the proper storage of personal data.

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

History of crypto in Uzbekistan

Uzbekistan legalised crypto trading in 2018 but banned residents of the country from purchasing cryptocurrencies in December 2019, although they were allowed to sell. Now the National Agency of Project Management has reminded the public that in accordance with the presidential decree “On measures to develop the digital economy in the Republic of Uzbekistan” and the country’s law “On licensing and notification procedures”, the establishment of cryptocurrency exchanges is subject to licensing.

The government is still trying to encourage some aspects of crypto activity. In January 2020, Uzbekistan unveiled their plan to create a national mining pool. The state also announced its intention to create a licensed cryptocurrency exchange where miners will be able to sell their coins, and promised to create a blockchain valley, as well as introduce crypto tax benefits.

Nevertheless, in September 2021, a high-ranking official central bank official said that cryptocurrencies such as Bitcoin (BTC) will never be recognised as legal tender. Behzod Khamrayev, Deputy Chairman of the Central Bank of the Republic of Uzbekistan (CBU), noted that, unlike cryptocurrencies, the national fiat is backed by the bank’s assets. He also said that Bitcoin will never be on par with “world currencies” such as the dollar, euro, and yen.

We feel like Uzbekistan’s government should reconsider its stance on cryptocurrencies. Some professional players’ hands have been tied, but scams haven’t been eradicated. Conversely, now even professional companies have to operate underground.

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James Taylor avatar
James Taylor

Trends are temporary. The blockchain isn’t a trend; it’s the future. I want to help as many people as possible understand it in a simple, clear and interesting way.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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