Legal Regulation Changes Of Mining And Cryptocurrency Circulation In Kazakhstan. Part I

November 2025 marked a significant moment for Kazakhstan's digital asset sector. The country announced and enacted comprehensive amendments to its Law "On Digital Assets" as part of a broader legislative package on digitalisation and artificial intelligence. These changes, introduced by Law No. 231-VIII, reshaped the legal framework governing cryptocurrency and mining by updating core definitions, licensing rules, and regulatory oversight. As a result, the regulatory landscape for mining, exchanges, and state supervision was materially revised.

Updated Definitions and Terminology

The amended law introduces clearer definitions for several key concepts that had previously lacked precision, enhancing legal certainty:

• "Digital asset turnover" is now defined as the execution of civil-law transactions involving digital assets. This distinction draws a clear line between participants who merely create or hold digital assets and those who professionally intermediate transactions between third parties.
• "Issuance of a digital asset" is defined as the action aimed at the emergence of a digital asset as an object of civil rights, effectively clarifying what constitutes the creation or initial offering of a token.
• "Digital asset exchange" is defined more broadly to include legal entities providing organisational and technical support for trading, issuance, settlement, and storage of digital assets. This reflects the central role of licensed exchanges, including their potential involvement in token issuance and custodial services.

Definitions related to digital mining were also refined. The concept of a digital mining data centre no longer requires a production building outside residential zones, instead focusing on infrastructure that ensures the functioning of computing capacity. Similarly, the definition of a digital mining pool now refers to digital assets "arising" from mining rather than merely "obtained," aligning terminology with the nature of mining as a process of asset creation. The removal of references to "data processing" further streamlines the legal language.

Licensing Rules and Regulatory Authority

One of the key outcomes of the amendments is the move toward a genuinely unified licensing framework for digital asset activities. The law now draws a firm line: organising the turnover of digital assets without a license is no longer tolerated. In practical terms, any entity that facilitates trading in digital assets must operate either under the Astana International Financial Centre (the "AIFC") regime or in accordance with Kazakhstan's national licensing rules. This closes long-standing grey areas and brings crypto trading firmly into the regulated perimeter.

The revised Article 11 makes this architecture explicit by reserving the organisation of digital asset turnover exclusively for licensed exchanges. To make this model workable in practice, the law also broadens access to financial infrastructure. Alongside second-tier banks, the National Postal Operator is now permitted to service licensed exchanges and AIFC-regulated crypto firms, improving fiat on- and off-ramps, particularly outside major financial centres.

At the same time, the amendments sharpen the division of regulatory roles. The AIFC remains the primary venue for licensing digital asset exchanges, especially those dealing in unbacked cryptocurrencies, while national authorities continue to oversee the issuance and circulation of asset-backed tokens within Kazakhstan. Activities conducted outside the AIFC therefore fall squarely under national law, while AIFC-based exchanges operate within a parallel, but coordinated, regulatory framework.

Perhaps most importantly, the amendments leave little room for informal or unregulated activity. Organising digital asset turnover without a license is prohibited regardless of whether the asset is backed, and the issuance and circulation of unbacked cryptocurrencies are confined to the AIFC or a special National Bank regime. Outside these channels, traditional crypto trading and token offerings have no legal footing. Backed digital assets, by contrast, remain permissible in the domestic market, subject to licensing and ongoing supervision. The overall effect is clear: cryptocurrency activity is steered toward regulated venues, where both market participants and investors operate within a defined and enforceable legal framework.

Rather than serving as a formal compliance layer, the unified licensing regime reshapes the structure of Kazakhstan's crypto market. Unlicensed pathways are cut off, and trading is steered toward regulated platforms where oversight can actually be enforced. This matters for investors, because institutional participation depends less on innovation and more on legal certainty.

Digital Mining: New Status and Relaxed Obligations

The 2025 amendments made significant changes to digital mining regulations, reflecting Kazakhstan's evolving stance as a major crypto-mining hub. Perhaps the most welcome change for miners is the repeal of the "mandatory sale" rule. Previously, the law had imposed a requirement that miners selling the cryptocurrency they produced in Kazakhstan must sell at least 75% of those assets through licensed digital asset exchanges, specifically through AIFC-licensed exchanges. This was to be phased in – 50% during 2024 and 75% from 2025 onward – to ensure tax transparency and funnel mining profits through regulated channels. Law No. 231-VIII eliminated this requirement entirely: Article 8, point 4 – which mandated the sale quota – has been deleted. This marks a significant shift toward a more open market approach for miners. Miners are no longer legally compelled to liquidate their coins via local exchanges, granting them freedom to choose how and where to sell their output. The removal of this outdated rule is expected to increase business freedom for mining operations and improve their profit margins, as they can seek the best prices and international buyers without a state-imposed quota.

In addition, the law grants official legal status to mining as a distinct activity and clarifies who can engage in it. The new version of Article 8(5) explicitly states that cryptocurrency mining in Kazakhstan is permitted for individual entrepreneurs and legal entities of Kazakhstan, and importantly, that mining activity "is not considered to be the organisation of digital asset turnover.". This delineation means that mining – the process of generating cryptocurrency – is separated from the regulated sphere of trading. By decreeing that miners are not organising the circulation of assets, the law ensures that miners are not treated as exchanges or traders of crypto for regulatory purposes. They will still need a license to conduct mining (the prior licensing requirement for mining farms remains in place), but they are no longer burdened by being classified in the same category as crypto exchanges. As a result, miners face less regulatory risk; their activity is recognised as lawful production of digital assets rather than an illicit issuance of unbacked currency. This change, as industry observers noted, "grants an official status to mining" and reduces regulatory uncertainties for the industry.

Another implication is the localisation requirement for mining: only Kazakhstan-registered individuals or companies can legally mine crypto in the country. Foreign investors are not barred from mining, but they would need to establish a local entity or partner with one, ensuring the activity falls under Kazakh jurisdiction. This aligns with Kazakhstan's broader strategy of having mining operations accountable onshore after the country experienced a boom of foreign miners relocating there. The law did not alter the existing licensing and accreditation framework for mining pools and data centers – mining pools still must be accredited and data centers must meet certain standards – but by removing the forced sale rule and clarifying mining's legal nature, Kazakhstan has made itself a more attractive and legally predictable environment for crypto miners.

Digital Asset Exchanges and Market Infrastructure

Digital asset exchanges now sit at the center of Kazakhstan's crypto market, but they do so within a much tighter and more deliberate regulatory frame. The amendments make this positioning explicit: only licensed exchanges may organise the trading of digital assets. Within that structure, the Astana International Financial Centre continues to play a familiar role. Article 11(1) still defers the licensing and supervision of exchanges operating in the AIFC to its own regulatory acts. In practice, this preserves the AIFC as the primary venue for crypto exchanges dealing in unbacked digital assets, operating under English common law principles and within a sandboxed environment designed for financial innovation. Importantly, the national amendments leave this ecosystem intact. Activities carried out by AIFC-licensed exchanges remain governed by the AIFC's own rulebook, ensuring continuity for foreign investors and firms that have already built their operations there.

What changes more visibly is what happens outside that ring-fenced space. For years, much of Kazakhstan's domestic crypto activity unfolded beyond formal regulation, relying on offshore exchanges or informal OTC channels. The new law draws a clear boundary around that practice. By outlawing unlicensed operations, it effectively shuts down the informal routes that many local users had come to depend on. In their place, the authorities are preparing a domestic framework for licensed crypto-exchange service providers. Under this model, companies will be permitted to offer crypto-to-fiat services under the supervision of the National Bank of Kazakhstan, operating in tenge and subject to nationally defined licensing rules. These providers will not have free rein: the National Bank will determine which digital assets may be offered for trading, reinforcing a controlled and curated market. The logic behind this shift is pragmatic. With only a small fraction of local investors previously using AIFC-licensed exchanges, the aim is to bring the bulk of retail activity into a supervised domestic channel rather than leaving it dispersed across unregulated platforms.

Alongside this structural reconfiguration, the amendments reinforce existing investor protection obligations. Exchanges remain required to warn users about the risks associated with unbacked digital assets, reflecting the volatility and speculative nature of cryptocurrency markets. Issuers of asset-backed tokens are subject to comparable disclosure requirements, ensuring that investors are informed of material risks before committing capital. These safeguards are complemented by enhanced financial monitoring: entities involved in the issuance or circulation of backed digital assets are treated as subjects of anti-money laundering regulation and must comply with full KYC and reporting obligations. Taken together, these measures bring digital asset businesses closer to the compliance standards applied to banks and traditional securities market participants.

The broader supervisory framework remains in place, but its importance increases as licensing becomes the primary gateway to lawful activity. Article 12 of the Digital Assets Law continues to anchor state oversight in the inspection mechanisms of the Entrepreneurial Code, empowering regulators to assess compliance across the sector. As licensing boundaries and regulatory responsibilities become clearer, closer scrutiny of exchanges and mining operations is likely. These amendments also form part of a wider legislative effort to strengthen Kazakhstan's digital governance. Revisions to laws on personal data protection, cybersecurity, and informatisation impose stricter requirements on data processing, information security services, and critical IT infrastructure. While not crypto-specific, these changes shape the operational environment for digital asset businesses by raising baseline expectations for data handling and system security.

Taken together, the November 2025 amendments mark a shift in tone as much as in substance. Rather than layering new controls on top of an already fragmented system, the law consolidates regulation around licensed intermediaries and defined jurisdictions. Informal activity is pushed to the margins, while exchanges operating under the AIFC or national supervision are brought firmly into the financial system. The result is a framework that feels more settled and intentional: one that seeks to accommodate digital assets as part of Kazakhstan's broader financial architecture, without abandoning regulatory discipline in the face of technological change.

Legal and Investment Impact Analysis

Kazakhstan's latest crypto reforms signal a decisive pivot from caution to embrace. After years of tight controls, the government is now openly welcoming cryptocurrency ventures, especially in mining. Crucially, the legal status of mining has been clarified and elevated. For the first time, cryptocurrency mining is explicitly recognised as a permitted entrepreneurial activity for both individuals and companies, and it is separated from the heavily regulated business of crypto trading. In practical terms, this means miners are no longer treated like would-be exchanges or money transmitters simply for creating new Bitcoins or other tokens. They can focus on running their server farms without fear that they're violating currency laws, a huge relief that slashes their compliance burden. Taken together with the lifted sale quotas, these changes paint Kazakhstan as a far more hospitable environment for miners.

It's a remarkable turnaround for a nation that, just a couple of years ago, saw its share of the global Bitcoin hashrate plunge from a peak of around 18% in late 2021 to roughly 4% by mid-2023 amid power shortages and regulatory crackdowns. Many miners had packed up or scaled down when the rules got tough. Now, with friendlier policies and a pledge of support, Kazakhstan is poised to win back some of that lost ground. The country's abundant coal and natural gas resources, once a magnet for mining operations, can again be leveraged to attract investment, especially now that the rules of the game are clearer and fairer.

At the same time, this "clarity" removes a certain charm of underdeveloped regulation in the area, because clearer legal status also means more workable control. That is exactly what many crypto actors try to avoid, given the decentralised nature of the most popular assets, particularly unbacked cryptocurrencies. But this tightening was, in many ways, inevitable. A state can afford to be indifferent to a fast-growing market only for so long, and the numbers quietly showed why: only around 5% of market participants were fully compliant under the earlier framework, while the rest operated in a grey market that was neither safe for investors nor ideal for regulators. For many, the grey market was simply the rational choice: it was cheaper, easier, and more liquid, especially when the law attempted to force behaviour that did not match how global crypto actually clears.

That is why the repeal of the notorious mandatory sale quota matters far beyond symbolism. Under the old approach, miners were pushed to route the bulk of their sales through AIFC-licensed exchanges (a model that was staged from 50% to 75%). In theory, it looked like "discipline". In reality, it often felt like a bottleneck, and it nudged people toward offshore selling, offshore custody, and offshore behaviour. With the quota removed, the state is effectively signalling that it wants miners operating onshore, but without forcing them into commercially awkward rails that made compliance feel like self-sabotage. This is where the warming becomes tangible: Kazakhstan is not merely legalising an activity; it is trying to make legal participation less irrational.

The timing also explains why now. The global backdrop is an AI-and-compute scramble: demand for advanced chips and infrastructure is skyrocketing, and governments are treating compute capacity as strategic. Even in Europe, the direction is obvious. The Netherlands has been moving publicly and aggressively on AI infrastructure, including European-backed plans for an "AI factory" in Groningen, framed as strategic capacity for innovation and digital independence. At the same time, major players are expanding data-centre capacity to "power the AI economy", which in practice means more electricity demand, more GPUs, more competition for hardware, and a renewed premium on jurisdictions that can host large compute operations. Kazakhstan's digital agenda fits into this wider arc: it has established a dedicated Ministry of Artificial Intelligence and Digital Development, clearly treating digital infrastructure and governance as a top-level state priority rather than an afterthought.

Against this background, Kazakhstan's message sounds less like a change of heart and more like an assertion of ambition. The state is clearly seeking to attract investors amid the AI-driven technology boom, with projects such as Alatau City already being promoted as future-oriented investment hubs linked to advanced industries and large-scale development. By fostering an ecosystem in which digital assets and AI can develop under a structured regulatory framework, Kazakhstan aims to move beyond its traditional oil-and-minerals profile toward a more diversified, knowledge-based economy.

Internationally, Astana's pivot toward a pro-crypto stance is both strategic and timely. A global competition is underway to attract digital asset businesses, capital, and talent. While some major economies remain cautious, others have embraced regulated openness. Hong Kong has reopened retail crypto trading under a licensing regime to strengthen its fintech position, the European Union has advanced MiCA as a comprehensive regulatory framework, and the UAE, particularly Dubai, continues to position itself as a crypto-friendly jurisdiction through specialised regimes. Kazakhstan now seeks to join this group on its own terms. Unlike financial centres such as Hong Kong or Dubai, its comparative advantage lies in the physical foundations of the crypto economy, energy resources, hardware capacity, and a geographic position bridging major markets.This is where the prediction becomes realistic: if the reform is implemented consistently and if settlement rails continue to open up, it is reasonable to expect a new wave of interest, not only from miners but from the surrounding ecosystem that follows miners everywhere, data-centre operators, engineering contractors, hardware logistics, cybersecurity vendors, compliance providers, and exchange-linked service firms. The quota repeal alone improves treasury flexibility and makes Kazakhstan meaningfully more competitive as a base of operations. But the inflow will not be automatic. It depends on whether regulation remains stable long enough for investors to believe the "warming" is durable, and whether power policy keeps pace with the very demand the state is trying to attract.

The broader implications for Kazakhstan's economy and society are significant. These reforms could accelerate the country's evolution from a commodities-dependent economy into a regional fintech and crypto powerhouse. An influx of mining companies and investment means more demand for local services, from electrical engineering and construction to IT and cybersecurity, potentially creating new jobs and expertise. It also incentivises Kazakhstan to continue upgrading its energy grid, including sustainable energy projects, to support high-tech growth without sacrificing domestic power needs.

Yet a fast leap carries risk. If investor interest and mining expansion outpace grid capacity and enforcement readiness, the country could relive the same cycle it already experienced: rapid growth, system strain, and a political push to tighten again. In other words, the better the invitation works, the more pressure it puts on the state to manage the consequences of success. Still, given the direction of global policy and capital, and given how visibly Kazakhstan is now aligning crypto reforms with a broader digital development narrative, a larger inflow of miners and related investors is not just plausible, it is a scenario worth expecting.

Legislations:

1. Law of the Republic of Kazakhstan No. 193-VII dated 6 February 2023 "On Digital Assets in the Republic of Kazakhstan" (as amended and supplemented as of 20 November 2025)
2. Law of the Republic of Kazakhstan No. 231-VIII (17 Nov 2025) "On amendments and additions to certain legislative acts on issues of artificial intelligence and digitalization" (extracts amending the Law on Digital Assets).
3. Law of the Republic of Kazakhstan No. 93-VIII dated 19 June 2024 "On Mass Media"
4. Law of the Republic of Kazakhstan No. 154-XIII dated 15 September 1994 "On Operative-Search Activities" (as amended and supplemented as of 16 September 2025)
5. Law of the Republic of Kazakhstan No. 2710 dated 21 December 1995 "On National Security Bodies of the Republic of Kazakhstan" (as amended and supplemented as of 20 November 2025)
6. Law of the Republic of Kazakhstan No. 544-II dated 12 April 2004 "On Regulation of Trading Activities" (as amended and supplemented as of 1 January 2026)
7. Law of the Republic of Kazakhstan No. 567-II dated 5 July 2004 "On Communications" (as amended and supplemented as of 2 January 2026)
8. Law of the Republic of Kazakhstan No. 274-IV dated 4 May 2010 "On Consumer Rights Protection" (as amended and supplemented as of 8 June 2024)
9. Law of the Republic of Kazakhstan No. 94-V dated 21 May 2013 "On Personal Data and Their Protection" (as amended and supplemented as of 16 September 2025)
10. Law of the Republic of Kazakhstan No. 498-V dated 9 April 2016 "On Postal Services" (as amended and supplemented as of 20 November 2025)
11. Law of the Republic of Kazakhstan No. 418-V dated 24 November 2015 "On Informatization" (as amended and supplemented as of 30 November 2025)