President of Uzbekistan approves measures to organize the activities of crypto-exchanges

Tashkent, Uzbekistan ( -- President of Uzbekistan Shavkat Mirziyoyev signed a resolution “On measures to organize the activity of crypto-exchanges in the Republic of Uzbekistan” on 2 September 2018.

The document notes that the turnover of crypto-assets is regulated by special regulatory legal acts.

The operations of legal entities and individuals related to the turnover of crypto-assets, including those carried out by non-residents, are not taxable, and incomes received on these transactions are not included in the taxable base for taxes and other mandatory payments, the resolution said.

Foreign currency transactions related to the turnover of crypto-assets conducted by persons, who have received a license for carrying out activities in the area of the circulation of crypto-assets in the established manner, are not subject to the norms of the legislation on currency regulation.

Crypto-exchange is an organization that provides an electronic platform for the exchange, purchase and sale of crypto-assets. A crypto-asset is a collection of records in the block, which has value and owner.

The resolution underlined that the legislation on securities, stock exchanges and exchange activities does not apply to activities involving the circulation of crypto-assets and crypto-exchanges.

The license for the activity of crypto-exchanges is issued exclusively to foreign legal entities through the opening of subsidiaries or other enterprises on the territory of Uzbekistan, the document said.

For the implementation of industrial mining (use of more than 100 kWh), land plots are granted without conducting an electronic auction in special territories determined by Uzbekenergo and Uzbekhydroenergo in agreement with the National Project Management Agency under the President of the Republic of Uzbekistan, the Chairman of the Council of Ministers of the Republic of Karakalpakstan, khokims of the regions and the city of Tashkent, respectively.

The President of Uzbekistan has established licensing requirements for crypto-exchanges. The charter fund of the crypto-exchange should be at least 30,000 minimum wages in the form of cash on the application date, of which twenty thousand are reserved on a separate account in a commercial bank of Uzbekistan.

The company must have a working electronic system of crypto-exchange trades placed on servers that are located on the territory of Uzbekistan, as well as rules of crypto-exchange trade.

The resolution said that quotes for crypto assets will be formed on the basis of the ratio of demand and supply for them.

Also, the exchanges should store information on transactions with clients’ crypto assets, as well as their identification data and materials on customer relationships, including business correspondence for five years.

Crypto-exchanges will be able to receive remuneration for provided services, including crypto-assets, to establish its size and order of collection from customers (bidders).

Crypto-exchanges will be able to organize exchange transactions with residents and non-residents of Uzbekistan, aimed at acquisition and (or) alienation of crypto-assets for national and foreign currency, as well as the exchange of crypto assets for other crypto assets.

The National Agency for Project Management was entrusted within a month to approve the procedure for licensing the activities of crypto-exchanges and to make proposals on amendments and additions to the legislation.

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