Regulators in Kazakhstan have introduced a limit to the amount of money that retail investors can spend on crypto purchases. The limits will apply to purchases that are made on domestic exchanges.
According to Kapital, the decision was made by the Astana International Financial Center (AIFC)- the financial hub that answers to the President of Kazakhstan and is incharge of regulating crypto firms and other finance providers.
The decision to introduce a limit was made in a low-key manner. Details of the rule change were unveiled by a media outlet in response to a request for information.
As per the new rules, retail traders must prove their income and asset worth, excluding the worth of the houses or apartments that they use as their primary residences. If traders fail to do so, they will only be able to spend a total of $1000 per month on crypto purchases.
Those who do prove the value of their income and assets will be able to spend significantly more than this on crypto but will be capped at $100,000 per year. The AIFC added yhat investors who prove their incomes will not be able to spend more than 10% of their annual income or 5% of the value of their combined assets on crypto.
The rules have been put in place to protect traders as transactions associated with crypto are high risk. Retail investors can currently avoid the rules by using international trading platforms, which are yet to be regulated by Kazakhstan. If the AIFC does decide to limit these platforms, crypto trading in the country could become difficult.
Earlier this year, the AIFC talked about potentially capping retail investors at $2000 per month. The new $1000 limit is a big step away from this.
Kazakhstan is not the only country to propose investor caps. Russia’s Central bank has also voiced it’s desire to impose an annual spending cap for retail investors of $7,800 on crypto purchases. At the time, critics slammed the notion saying that the body did not have the powers to enforce this.
The AIFC is currently walking on a pilot project that Kapital says is “related to the launch of crypto exchanges” and will be released before the end of the year.
