November 25, 2021

Residents of the Republic of Uzbekistan can now buy crypto-assets and tokens

Residents of the Republic of Uzbekistan from November 22 of this year are allowed to carry out all types of crypto-exchange trading in crypto-assets and tokens for the national currency in accordance with the order of the Director of the National Agency for Project Management under the President.

However, it should be borne in mind that residents with non-residents can only carry out transactions for the sale of crypto-assets and tokens for foreign currency, i.e. residents are prohibited from buying crypto assets and tokens from non-residents and they can only sell crypto assets and tokens to non-residents. The choice of crypto assets as an object of acquisition and, accordingly, the consequences of this choice are the risk of the buyer himself.

Previously, residents of the Republic of Uzbekistan were only entitled to sell crypto assets.

According to the order, other changes were made to the legislation in the field of crypto-assets turnover. For example:

1)         A new definition of the concept of token is given.

A token is a unit of account in a distributed data ledger that serves to certify a commitment or ownership of a specific asset. The token is issued by legal entities or individual entrepreneurs registered on the territory of the Republic of Uzbekistan in order to attract investments and finance activities

2)         It has been established that the issue, registration of the issue and placement by crypto-exchanges of unsecured tokens is prohibited on the territory of the Republic of Uzbekistan. The crypto exchange is responsible for the issuance, registration of the issue, placement and circulation of unsecured tokens in accordance with the legislative acts.

3)         And also the list of duties of the crypto-exchange has been expanded.

Crypto exchanges, among others, are required to:

(i)         determine whether or not the heads of legal entities, individual entrepreneurs and their representatives carrying out activities aimed at issuing and placing tokens on the crypto-exchange belong to the category of persons with whom it is not entitled to establish relations;

(ii)        check the actual availability of tangible and (or) other property contributed as collateral for tokens;

(iii)       approve the procedure for issuing, registering, placing and circulating tokens, including providing for:

  1. depositing funds in the amount of at least 10% of the amount planned to be attracted as part of the placement of tokens, in national and (or) foreign currency on a separate virtual account in the Clearing House of the crypto-exchange;
  2. ensuring the redemption of their tokens by the person who placed the tokens on the crypto-exchange at the expense of the funds deposited in a separate virtual account of the Clearing House in the cases and in the amount stipulated by the contractual obligations;
  • imposing a ban on the use of the words “state”, “provided by the state”, “supported by the state”, “Uzbekistan”, “Uzbek”, “national”, “sum (UZS)” in the name or symbols of the issued tokens, as well as the names of cities in Uzbekistan in full or abbreviated form, using their combinations in any language and in any form.