Crackdown on Illegal Mining and Cryptocurrency Trading: New Punishments Introduced
New Legislation Strengthens Penalties for Cryptocurrency Violations in Uzbekistan
A new law signed by President Shavkat Mirziyoyev on January 19 aims to strengthen liability for offenses related to digital technologies in Uzbekistan. The legislation, which will come into force three months after its official publication, introduces administrative and criminal penalties for violations of mining rules and the illegal circulation of crypto assets.
The law, which was approved by the Legislative Chamber of Oliy Majlis in September 2023 and received approval from the Senate in November, amends the Administrative Responsibility Code by adding Articles 155.4 and 155.5. Under these provisions, individuals engaged in illegal purchase and sale, exchange, or mining of cryptocurrencies may face fines ranging from 20 to 100 BCAs (6.8-34 million soums), as well as potential periods of arrest or imprisonment.
In cases of significant damage caused by the violation, the penalties increase, with the potential for imprisonment of up to 5 years for repeat offenders or individuals engaged in large-scale violations. Additionally, individuals who engage in hidden mining or cryptocurrency-related offenses in an organized or official capacity may face even harsher penalties, including imprisonment of up to 5 years.
The new legislation also introduces penalties for cryptoasset service providers operating without a license, as well as for operations with anonymous cryptocurrencies. The amendments also provide for the confiscation of tokens and equipment used in the commission of the offense.
In addition to administrative penalties, the law introduces a new Article 278.9 of the Criminal Code, which imposes criminal liability for repeat violations related to the mining of cryptocurrencies. Individuals found guilty under this provision may face fines of up to 100 BCAs (34 million soums), as well as 2-3 years of correctional labor, restriction, or imprisonment for up to 1 year.
It is important to note that individuals who voluntarily report a violation and contribute to its disclosure may be released from liability under the new legislation.
With these amendments, Uzbekistan is taking a firm stance on regulating the use of digital technologies and cryptocurrencies within its borders. The government hopes that these new penalties will serve as a deterrent to individuals and organizations who may seek to engage in illegal activities related to crypto assets.
