Kyrgyzstan Advances Bill to Ban Binary Options

Kyrgyzstan is progressing with legislation that would outlaw binary options schemes and introduce tougher criminal penalties for illegal gambling and lottery activities. The proposed measures target not only platform operators but also those involved in promoting schemes, recruiting participants and collecting assets from residents.

On October 27, the Parliament’s Committee on Finance, Budget, Entrepreneurship and Competition Development approved the draft legislation at its second reading. The bill proposes amendments to the Criminal Code and existing gambling and lottery laws.

Binary Options to Be Treated as Gambling

Kairat Mamatov, chairman of the State Service for Regulation and Supervision of the Financial Market, outlined the proposed approach during an interview on Birinchi Radio.

He explained that schemes in which individuals wager on movements in the prices of their assets would fall under gambling regulation. Although these activities do not operate like conventional casinos, the authorities classify them as gambling.

This distinction forms the basis of the proposed legal changes. The draft seeks to bring binary options schemes within the scope of gambling legislation, addressing financial products that involve betting on asset price fluctuations.

Proposed Restrictions Extend to Promotion and Recruitment

The planned prohibition would cover more than the operation of binary options platforms. Organising such schemes, advertising them and recruiting people to participate would also be prohibited.

The bill would additionally prevent operators from accepting either fiat or virtual assets from residents. This means the proposed restrictions would encompass the organisation and promotion of schemes, participant recruitment and the collection of funds or other assets.

By covering these activities separately, the legislation seeks to address the wider operations surrounding binary options schemes rather than focusing solely on the platforms themselves.

Unauthorized Online Lotteries Face Criminal Liability

The draft also proposes introducing specific criminal liability for running lotteries without the required authorisation. The provision would include online lottery operations, bringing digital formats within the proposed Criminal Code amendments.

These changes would accompany increased criminal penalties for illegal gambling activities. The legislation therefore addresses unauthorized lotteries and broader illegal gambling operations alongside the proposed ban on binary options.

Fraud and Money Laundering Prevention Among Legislative Goals

Combating financial fraud and preventing money laundering are among the objectives identified for the proposed legislation.

The restrictions on binary options activities, together with criminal liability for unauthorized lottery operations and higher penalties for illegal gambling, form part of the measures being advanced by lawmakers.

The committee's approval on October 27 represents the bill's second-reading stage. The proposed restrictions remain part of draft legislation and should not be interpreted as measures already in force.