Kazakhstan Aims to Protect Retail Crypto Investors
According to a report by local news outlet Kapital.kz, based on information obtained from the Astana Financial Services Authority (AFSA), retail investors who submit evidence of their income and assets can invest 10% of their annual income or five percent of their assets, minus cost of main housing, into crypto, but not more than $100,000.
Also, reporting finances could allow the retail investor to purchase cryptocurrency worth over $1,000. Meanwhile, retail traders who do not provide confirmation of income and assets will only be able to invest a maximum of $1,000 into crypto monthly.
The AFSA said that the limit on cryptocurrency purchase for retail investors was to protect them against risks associated with investments in such assets, which could lead to total loss for the trader.
However, the current limit, which the AFSA said was already implemented since October26, 2021, is different from an initial proposal put forward back in July. The Financial Services Regulatory Committee of the Astana International Finance Center (AIFC) proposed a $2,000 monthly limit on cryptocurrency investment for retail investors.
Meanwhile, AFSA also stated that a roadmap to develop the cryptocurrency industry in Kazakhstan was already in place. According to the agency, crypto exchanges will operate as a pilot, starting from the end of 2021. The pilot project is expected to last through 2022, after which necessary changes will be made both to the country’s legislation and the AIFC acts.
More Countries Restrict Retail Crypto Investment
Regulators globally have continued to warn investors about the risks involved in crypto investments, particularly directing their warnings to retail traders. While Kazakhstan is setting limits for small investors, places like Hong Kong are looking to prevent them from crypto investment.
Back in November 2020, Hong Kong’s Financial Services and the Treasury Bureauintroduced a proposal that would ban retail investors from cryptocurrency trading. The proposal further stated that only professional investors who hold a minimum of HK$8 million ($1 million) can be involved in crypto trading activities.
However, the proposal faced criticisms from industry stakeholders, who believe that ban retail crypto trading could drive affected investors to unregulated exchange platforms.
Meanwhile, Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, seemed to agree with the intended ban, stating:
“Imposing mandatory requirements to protect investors, prohibit market manipulation, and guard against money laundering and terrorist financing, we believe the proposed regime will further facilitate the development of the virtual assets industry in Hong Kong, leveraging our world-class regulatory framework.”
Also, the Bank of Russia, back in October 2020, also proposed to cap the purchase of crypto and other digital assets by retail buyers at $8,000 annually. According to the central bank, only accredited investors could make large cryptocurrency investments.