The NAPP proposed strengthening control over crypto providers.

NAPP Proposes Tightening Oversight of Crypto Providers

Tashkent, Uzbekistan (UzDaily.uz) —

The National Agency for Prospective Projects (NAPP) has presented draft amendments to the internal control rules for crypto asset service providers. These amendments are aimed at tightening requirements for responsible employees, managers, and procedures designed to prevent money laundering.

According to the proposed amendments, employees responsible for organizing and implementing internal controls will be required to hold the position of deputy head. Currently, these functions can be performed by other executives.

New crypto asset service providers will be required to appoint a responsible employee and submit their personal information to the NAPP within one month of receiving a license.

At the same time, it is proposed to tighten requirements for crypto provider executives. They must not be residents of countries that do not participate in international cooperation to combat money laundering.

Companies registered in such countries will also be unable to act as founders of the provider. It is proposed that qualifications and business reputation criteria be included in the requirements for the appointment, training, and education of employees. Furthermore, providers will be required to have a clear understanding of the client's activities, as well as their ownership and management structure.

The draft allows for the possibility of engaging a third party to identify and verify clients as part of due diligence. This third party is proposed to be a specialized organization that verifies the authenticity of personal data.

Specific requirements are established for providers with controlled or affiliated organizations that conduct transactions with money or other assets. In such cases, internal rules should be developed with a group-wide approach.

In particular, the rules should establish procedures for exchanging information to manage money laundering risks, ensure compliance, audit, and anti-money laundering functions at the group level, and obtain information about clients, their accounts, and transactions from branches and subsidiaries where necessary. Adequate confidentiality protection of the information received must be ensured.

The amendments also clarify the procedure for reporting suspicious transactions. Cryptocurrency providers will be required to send such messages to the Department for Combating Economic Crimes of the Prosecutor General's Office via secure communication channels.

Secure channels are proposed to include electronic data transmission systems with cryptographic protection, including encryption, secure email addresses, and a personal account in a dedicated system. To access a personal account, a request will need to be submitted to the NAPP, specifying the organization's details and the responsible employee.

If a transaction is suspended or assets are frozen due to the client being included on the list of persons involved or suspected of involvement in terrorism, the responsible employee will be required to notify the client as soon as possible.

Furthermore, the responsible employee will need to be informed of the procedure for resuming the transaction.

Public comment on the draft amendments continues until August 22.