A new presidential resolution (“Resolution”) came into effect on the 2nd September 2018 in the Republic of Uzbekistan, which will cover the regulation and licensing of cryptocurrency exchanges in the country.
According to the Resolution which is named, “The Regulation on the measures of cryptocurrency exchange establishment in the Republic of Uzbekistan”, a crypto exchange will be considered a legal entity that offers an electronic platform for “exchange, buying and selling operations with crypto tokens.” The coins themselves will be classified as “a set of blockchain records that have value”.
The Resolution states that only legal entities from foreign countries can apply for a crypto exchange license. However, in order to operate the crypto exchange platforms, they will need to store the information on servers in Uzbekistan and open a subsidiary in the country. The resolution also specifies a minimum capital requirement of roughly UZS 5,591,250,000 ($710,000) to establish a crypto exchange.
In case the government requires data, entities will have to store five years of user data — log archives: chats, payment information, IDs and more. The responsibility for monitoring the crypto exchanges will lie on the entity that provides government licensing services.
Moreover, private and legal entities within the country can exchange coins, and buy or sell them freely. Any private deals will not be subject to taxation. Also, coin conversion operations to fiat will not fall under Uzbek stock market regulations and any trading revenues gained as a result of cryptocurrency trading will not fall under foreign currency earnings taxation.
Finally, the Resolution highlights that crypto exchanges must also comply with counter terrorist and anti-money laundering laws. They are also obliged to keep information on crypto transactions, clients’ personal data and their correspondences for at least five years.