RESOLUTION OF THE CABINET OF MINISTERS OF THE KYRGYZ REPUBLIC

of September 16, 2022 No. 514

About questions of regulation of the relations arising in case of turnover of virtual assets

According to Articles 16, of 18, of 25, 28 Laws of the Kyrgyz Republic "About virtual assets", articles 13, of the 17th constitutional Law of the Kyrgyz Republic "About the Cabinet of Ministers of the Kyrgyz Republic" the Cabinet of Ministers of the Kyrgyz Republic decides:

1. Approve:

1) Regulations on activities of the operator of the biddings of virtual assets (cryptoexchange) and maintaining the register of operators of the biddings of virtual assets (cryptoexchanges) according to appendix 1;

2) Regulations on issue (release), the address of virtual assets and on procedure for maintaining the Unified state register of issues of virtual assets according to appendix 2;

3) Regulations on activities of the operator, exchange of virtual assets and maintaining the register of operators of exchange, virtual assets according to appendix 3;

4) the Order of registration and issues of the certificate for activities for implementation of mining according to appendix 4.

2. Bring in the order of the Government of the Kyrgyz Republic "About approval of the Regulations on assets of investment funds" of May 27, 2011 No. 252 the following changes:

in the Regulations on assets of investment funds approved by the above-stated resolution:

- add Item 5 with the offer third the following content: "The above-stated requirements are not applicable to investment fund for skilled investors whose means can be placed according to the investment declaration.";

- add Item 7 with paragraphs the seventeenth, eighteenth the following content:

"-investment fund for skilled investors - investment fund of the closed type which only skilled investors can hold shares (shares);

- the skilled investor - physical person or legal entity, including being the nonresident of the Kyrgyz Republic which conforms to requirements imposed by the legislation of the Kyrgyz Republic in the field of the security market to the skilled investor. The skilled investor shall specify the status as that person when signing any documents, its money allocated for investment into securities of investment funds.";

- add Item 8 with the paragraph the second the following content:

"Investment funds for skilled investors can have virtual assets.";

- add Item 9 with the subitem "e" of the following content:

"e) digital deposits of investment fund for skilled investors of one issuer shall not exceed 20 percent of net assets value of investment fund.";

- add Item 13 with the offer the second the following content: "These restrictions are not applicable to investment fund for skilled investors whose means can be placed according to the investment declaration.".

3. Bring in the resolution of the Cabinet of Ministers of the Kyrgyz Republic "About questions of subordinated divisions and organizations of the Ministry of Economy and Trade of the Kyrgyz Republic" of December 10, 2021 No. 300 the following changes:

in Regulations on Service of regulation and supervision of the financial market under the Ministry of Economy and Trade of the Kyrgyz Republic approved by the above-stated resolution:

- Item 11 after words of "financial market" to add "financial market" respectively with words ", the market of virtual assets", "and the market of virtual assets";

- in Item 13:

in subitem 1:

paragraphs "financial market", the second or fourth after words, in different cases to add with words ", the market of virtual assets" in the corresponding cases;

add with paragraphs the eighth or tenth the following content:

"-develops the state and other programs of implementation and development of technology of the distributed registers in the field of regulation of turnover of virtual assets, renders assistance in their realization;

- performs coordination and interaction with other state bodies, the international institutes and the organizations for development and functioning of the market of virtual assets;

- carries out expertize of projects of the regulatory legal acts regulating turnover of virtual assets;";

in subitem 2:

paragraphs "financial market", the fourth, fifth, ninth, tenth after words, in different cases to add with words ", the market of virtual assets" in the corresponding cases;

add with paragraphs the fourteenth or nineteenth the following content:

"-considers, registers release of virtual assets, registers white paper of release of virtual assets of issuers of the Kyrgyz Republic;

- issues the certificate on implementation of mining according to the legislation of the Kyrgyz Republic regulating the market of virtual assets;

- stops, renews, in the procedure established by the legislation of the Kyrgyz Republic withdraws the certificate of mayner in cases, stipulated by the legislation the Kyrgyz Republic;

- keeps the Unified state register of issues of virtual assets;

- keeps the register of the granted certificates of competency of the skilled investor of virtual assets;

- establishes operational requirements to service providers of virtual assets;";

in subitem 3:

paragraphs two, third after words of "financial market" to add with words ", the market of virtual assets";

to state paragraphs of the fifth, sixth in the following edition:

"-appeals with claims to court concerning consumer protection of services of regulated subjects of the non-bank financial market, the market of virtual assets and owners of valuable papers / virtual assets;

- provides training and certification of members of the non-bank financial market, the market of virtual assets, certification of applicants for the right of receipt of the qualification certificate of the auditor, the certificate of competency of the professional participant of the security market, the certificate of competency of the skilled investor of virtual assets according to the legislation of the Kyrgyz Republic;";

add with paragraphs the sixteenth, seventeenth the following content:

"-training of highly qualified personnel in the field of technology of the distributed registers, including blokcheyn and turnover of virtual assets;

- carrying out studying and researches on implementation of technology of the distributed registers, blokcheyn and other similar innovative technologies in different industries and to regulation of the relations arising owing to their implementation and application;";

paragraphs two, the ninth the subitem 4 after words "financial market" in different cases to add with words ", the market of virtual assets" in the corresponding cases;

- in Item 14:

subitems 5-8, 11, of 12, of 16, of 17, of 21, of 22, 25 after words "financial market" in different cases to add with words ", the market of virtual assets" in the corresponding cases;

in subitems 9, of 29, 30 after words "financial market" in different cases to add with words ", the market of virtual assets" in the corresponding cases, the words "securities" in different cases shall be replaced with words "valuable papers / virtual assets" in the corresponding cases;

in subitems 10, of 26, of 33, of 35, of the 36th word "securities" in different cases shall be replaced with words "valuable papers / virtual assets" in the corresponding cases;

in subitem 28 of the word "professional participant" in different cases shall be replaced with words "the professional participant / service provider of virtual assets" in the corresponding cases;

subitems 31, 32 after words "financial market" to add with words ", the market of virtual assets", to replace the words "securities", "prospectus" in different cases respectively with the words "valuable papers / virtual assets", "prospectus / white paper" in the corresponding cases;

declare subitem 34 invalid;

add with the subitem 49 of the following content:

"49) to make decisions on registration or on refusal in registration in the register of operators of the biddings of virtual assets (cryptoexchanges) and in the register of operators of exchange of virtual assets.".

4. This resolution becomes effective after fifteen days from the date of official publication.

Appendix 1

to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of September 16, 2022 No. 514

Regulations on activities of the operator of the biddings of virtual assets (cryptoexchange) and maintaining Register of operators of the biddings of virtual assets (cryptoexchanges)

1. General provisions

1. This Provision is developed according to Articles 25, of 28, 30 Laws of the Kyrgyz Republic "About virtual assets". The provision establishes the mandatory requirements imposed to activities of the operator of the biddings of virtual assets (cryptoexchange) in the Kyrgyz Republic.

Activities of the operator of the biddings of virtual assets (cryptoexchange) are licensed and are subject to state registration in the Register of operators of the biddings of virtual assets (cryptoexchanges). The procedure for state registration of operators of the biddings of virtual assets (cryptoexchanges) is determined by this Provision.

2. The basic concepts used in this Provision

2. In this Provision the following concepts are used:

The beneficial owner - physical person (physical persons) which finally (through chain of ownership and control) directly or indirectly (through the third parties) owns the property right or controls the operator of the biddings of virtual assets (cryptoexchange) or physical person, from name or for the benefit of which transaction (transaction) is made;

the client - the physical person or legal entity (organization), the foreign trust or legal education accepted on servicing or which are on servicing at the operator of the biddings of virtual assets (cryptoexchange) or with which the operator of the biddings of virtual assets (cryptoexchange) establishes or established business relations; 

percentage scoring is the quantitative assessment of risk level of virtual asset or virtual purse based on the analysis of his behavior, transactions and other factors connected with possibility of use in illegal actions, such as money laundering or financing of terrorism;

clearing - complex of transactions by determination of cross liabilities (collection, reconciliation, adjustment of information on transactions with virtual assets) and their offsetting on deliveries of virtual assets and calculations for them;

manipulation the prices of virtual assets - making of the actions having significant effect on demand and (or) the offer on virtual assets, market price of virtual assets or the trading volume virtual assets for the purpose of artificial overestimate or understating of the prices of virtual assets concerning the level developing in market conditions;

clearing bank - the commercial bank having the corresponding license, performing activities in the Kyrgyz Republic or behind its jurisdiction, but having the corresponding license of the country of stay;

the biddings by virtual assets - process of transactions of purchase and sale with virtual assets on electronic platform of the operator of the biddings of virtual assets (cryptoexchange);

bidders of the operator of the biddings of virtual assets (cryptoexchange) are the clients allowed by the operator of the biddings of virtual assets (cryptoexchange) to the biddings by virtual assets;

authorized body - authorized state body in the field of virtual assets;

electronic platform of the operator of the biddings of virtual assets (cryptoexchange) - information system within which are performed:

- acceptance, control and registration of applications for participation in the biddings by virtual assets;

- acceptance, control and registration of purchasing requests, sale and (or) exchange of virtual assets;

- transactions with virtual assets on electronic platform of the operator of the biddings of virtual assets (cryptoexchange);

- determination of the prices of virtual assets;

- determination of requirements and obligations of the parties by results of transactions with virtual assets, and also ensuring execution of these transactions;

- preparation and forming of reporting documents by results of transactions with virtual assets;

- storage, processing and disclosure of information necessary for making and execution of transactions with virtual assets;

- accomplishment of other functions necessary for bidders;

the operator of the biddings of virtual assets (cryptoexchange) - the service provider licensed and created in form of business of joint-stock company, connected with virtual assets, rendering the services which are directly promoting the centralized or decentralized transactions with virtual assets, information on transactions and which trading sessions reveals publicly by the notification of bidders about the place and time of tendering, the list and the quotation of the virtual assets admitted to trading, results of trading sessions;

the centralized operator of the biddings of virtual assets (cryptoexchange) - service provider, connected with virtual assets, rendering the services in transactions with virtual assets on the basis of centralized storage of virtual assets on the purses and through smart contracts;

the decentralized operator of the biddings of virtual assets (cryptoexchange) - service provider, connected with virtual assets, rendering services in transactions with virtual assets on the basis of network блокчейн with use of platform in the field of the decentralized finance;

listing - the procedure of inclusion of virtual assets in the list of the operator of the biddings of virtual assets (cryptoexchange) which correspond to the special criteria established by the operator of the biddings of virtual assets (cryptoexchange).

Other concepts are used in the values determined by the Law of the Kyrgyz Republic "About virtual assets".

3. Structural divisions of the operator of the biddings of virtual assets (cryptoexchange)

3. In structure of the centralized operator of the biddings of virtual assets (cryptoexchange) without fail there shall be following functional divisions:

- listing (release of virtual assets, steyblkoin);

- trade;

- information technologies and safety;

- clearing and identification of clients (KYC);

- internal control (komplayens-control).

4. The operator of the biddings of virtual assets (cryptoexchange) has the right to have and other functional divisions.

4. Requirements imposed to the operator of the biddings of virtual assets (cryptoexchange)

5. If the operator of the biddings of virtual assets (cryptoexchange) stores assets of users on the balances, he shall provide separate accounting of financial assets of the operator of the biddings of virtual assets (cryptoexchange), electronic virtual assets, the money which is at the operator of the biddings of virtual assets (cryptoexchange).

6. The operator of the biddings of virtual assets (cryptoexchange) shall provide control of transactions with virtual assets which pass through the digital purses belonging to the operator of the biddings of virtual assets (cryptoexchange) for the purpose of identification of violations of the law of the Kyrgyz Republic in the field of virtual assets and this provision.

In case of detection of such violations, the operator of the biddings of virtual assets (cryptoexchange) measures for their termination and non-admission in the future shall be taken.

7. Information on each fact of violation of the law of the Kyrgyz Republic in the field of virtual assets and this provision revealed by the operator of the biddings of virtual assets (cryptoexchange) (including confirming that such fact took place), shall be stored by the operator of the biddings of virtual assets (cryptoexchange) within 5 years from the date of identification of the specified fact. At the request of authorized body the operator of the biddings of virtual assets (cryptoexchange) shall no later than five working days from the date of receipt of the corresponding request in time give information on the called facts in authorized body.

8. In case of detection of the data specifying essential elements of offense the operator of the biddings of virtual assets (cryptoexchange) shall send without delay in writing the message on this crime to authorized body and law enforcement agencies.

9. The operator of the biddings of virtual assets (cryptoexchange) shall provide transparency of process of making and execution of transactions in its trade system by means of provision to bidders with virtual assets of opportunity to survey the course of this process with use of program technical means.

10. The operator of the biddings of virtual assets (cryptoexchange) shall provide technical base for maintenance, storage, processing and disclosure of information necessary for making and execution of transactions with virtual assets, including trade system.

11. The trade system of the centralized operator of the biddings of virtual assets (cryptoexchange) shall provide making by bidders of all types of transactions according to rules of trade in the virtual assets and steyblkoina approved with authorized body.

The decentralized operators of the biddings of virtual assets (cryptoexchange) have no single governing body, are controlled automatically or semi-automatic. Under semi-automatic management decisions on development of activities of the decentralized operator of the biddings of virtual assets (cryptoexchange) are made by developers together with bidders.

For trade on the platform of the decentralized operator of the biddings of virtual assets (cryptoexchange) registration is not necessary. The decentralized operator of the biddings of virtual assets (cryptoexchange) does not receive and does not store any data on users.

Trade on the platform of the decentralized operator of the biddings of virtual assets (cryptoexchange) is made by connection of purse of virtual assets. The decentralized operator of the biddings of virtual assets (cryptoexchange) does not store means, respectively responsibility for their safety is born only by bidders.

12. The operator of the biddings of virtual assets (cryptoexchange) shall have and dispose of the software which allows to hold smooth operation and the auction on the platform.

13. The operator of the biddings of virtual assets (cryptoexchange) shall develop and introduce the documentary rules and procedures regulating procedure for ensuring information security (cyber security) and going concern, consumer protection, processings of personal data of the service provider of virtual assets.

14. Operators of the biddings of virtual assets (cryptoexchange), persons under surveillance to authorized body, shall perform the legislation of the Kyrgyz Republic in the field of counteraction to financing of terrorist activities and to legalization (washing) of the criminal income.

15. The centralized operator of the biddings of virtual assets (cryptoexchange) shall receive and store necessary and exact information on the sender and the receiver of transfers of virtual assets, without delay and in protected mode to provide the specified information in authorized body on request and according to the procedure of the reporting (disclosure of information), and also in cases, stipulated by the legislation the Kyrgyz Republic concerning virtual assets and the relevant agreements (agreements), to send / transfer the above-stated information to other operators of the biddings of virtual assets (cryptoexchanges), and also other service providers of virtual assets or financial institution.

16. Centralized operators of the biddings of virtual assets (cryptoexchange) who act as receivers of virtual assets shall receive and store information on senders of transfers of virtual assets, and also without delay and to provide the specified information on request in authorized body on request in protected mode and according to the procedure of the reporting (disclosure of information).

17. The operator of the biddings of virtual assets (cryptoexchange) shall conduct work on identification, assessment, control and acceptance of effective measures for decrease in own risks connected with money laundering and financing of terrorism.

18. The centralized operator of the biddings of virtual assets (cryptoexchange) shall carry out in case of establishment of the relations with the client its identification or remote identification, and also verification or remote verification of identification data according to the legislation in the field of counteraction to financing of criminal activities and to legalization (washing) of the criminal income, and also in the field of turnover of virtual assets.

All checks of transactions of clients with virtual assets for the purpose of observance of requirements for counteraction to financing of criminal activities and to legalization (washing) of the criminal income (AML and KYT) without fail shall be carried out with use of information system (software) of the supplier of AML/KYT services determined by authorized body.

Percentage scoring is determined by authorized body.

18-1. Before transactions on sale to clients of virtual assets for money or electronic money, or on exchange of virtual assets of one type for virtual assets of other type the operator of the biddings of virtual assets (cryptoexchange) shall be convinced available at clients of the sufficient level of knowledge (competence) necessary for making of the specified transactions.

The operator of the biddings of virtual assets (cryptoexchange) has no right to conclude the specified bargains with clients concerning which lack of necessary level of knowledge (competence) is established.

Determination of level of knowledge (competence) for transactions specified in this Item is made by the operator of the biddings of virtual assets (cryptoexchange) by means of representation of the questionnaire (test) to clients for filling (decision).

The questionnaire (test) and changes/amendments to it are subject to approval of authorized body according to the procedure and the terms established by authorized body.

The authorized body after receipt of the adequate notice analyzes the received questionnaire (test) and in case of availability of notes/offers within 30 (thirty) calendar days from the date of registration of the notification informs the operator of the biddings of virtual assets on need of study of the questionnaire (test).

The operator of the biddings of virtual assets (cryptoexchange) shall inform the client on risks when implementing transactions with virtual assets via all available and clear channels, including and not excepting notifications on platform, e-mails, text and video records, and also in the course of registration or before implementation of the first transaction.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info