The National Agency for Prospective Projects (NAPP) of Uzbekistan has announced its intention to pursue legal action against Binance, one of the world's largest cryptocurrency exchanges. Deputy Director Vyacheslav Pak revealed this development at a press conference held on February 6 at the Agency of Information and Mass Communications (AIMC) under the Administration of the President of Uzbekistan, Spot reported.
The crux of the dispute lies in Binance's alleged operation without a license in Uzbekistan, compounded by concerns over the lack of a legal entity and the hosting of electronic platforms on servers within the republic. The agency levied a significant fine of UZS 102 mn ($8,256) against Binance, citing these violations.
Furthermore, Pak addressed the issue of peer-to-peer (p2p) transactions in the cryptocurrency realm, highlighting the absence of an effective mechanism for their control. He emphasized the potential risks associated with unregulated p2p trading, including the facilitation of illicit activities such as trading stolen or illegally obtained crypto assets. Consequently, NAPP remains steadfast in its decision not to authorize p2p transactions within the republic, citing concerns over regulatory oversight and security.
In February of the following year, Deputy Director Vyacheslav Pak disclosed Binance's insistence on legalizing p2p transactions in Uzbekistan while failing to establish a physical presence or transfer essential infrastructure to comply with regulatory requirements. NAPP remained steadfast in its stance, refusing to endorse p2p transactions until a viable means of regulation could be established.
Earlier Daryo reported that the past year saw a significant milestone with the institutional growth of the national crypto-assets market. NAPP granted nine licenses to service providers, such as exchanges, depositories, and stores, resulting in substantial government earnings amounting to UZS 36.2 bn ($2.9 mn). Additionally, there was a focus on initiatives aimed at bolstering consumer safeguards and addressing digital crimes.
The National Agency for Prospective Projects of Uzbekistan (NAPP) is a state organization authorized to implement the procedures for regulation, licensing and permitting in the spheres of crypto-asset circulation, capital market, insurance, e-commerce, lottery organization and bookmaking activities. NAPP believes their mission is to create a market that meets international standards, attract additional capital and investments to the country's economy, ensure investor protection, and create conditions for improving the welfare of citizens.
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