DAA 4.7: the reserve of a Fiat stablecoin is only operationally segregated; the Rules do not say whether it is protected from the issuer's own creditors and how it is shared among holders on insolvency

DAA 4.7.1(4) requires the issuer of a Fiat stablecoin to ensure that the reserve of assets is "operationally segregated from the proprietary assets of the issuer". DAA 4.7.3(7) requires the custody arrangements to protect the reserve against "claims of the custodian's creditors", and DAA 4.7.3(1)(a) requires that the reserve is "not encumbered nor pledged as Collateral". DAA 4.11.2(1) requires the issuer to grant holders redemption rights "on the reserve assets when the issuer is not able to comply with its obligations", while DAA 4.5(1)(c) speaks of "the rights or the absence of rights granted to the holders". The DAA, PMS and COB do not state that the reserve is held on trust for holders or is otherwise outside the issuer's estate. Under the Insolvency Regulations (Schedule 3) property of a company excludes only property held on trust, and under rule 5.46.1 of the Insolvency Rules unsecured debts rank equally. Because the issuer is a Money Service Provider (DAA 4.1(1)), COB 8.2 applies to it (COB 8.1.4), and COB 8.2.16(2)(c) requires money remaining with the firm to be paid to each Client before the general order of winding up; it is not clear whether this covers the reserve, which is not Client Money under COB 8.2.1 and PMS 9.3, and holders who have no client agreement with the issuer (DAA 4.11.2(3)). DAA 4.7.2(3)(b) refers to an issuer "required to implement a redemption plan", but no rule sets out such a plan. Example: if the reserve forms part of the estate and holders rank as unsecured creditors, an issuer with 50 million USD of coins in circulation, a reserve of 50 million USD, no other assets, other unsecured creditors of 10 million USD and winding-up costs of 1 million USD pays holders about 82 cents per coin (49 / 60). The wording of 4.7.1(4), 4.7.3(7) and 4.11.2(1) is close to Articles 36(3), 37 and 39(1) of the EU Markets in Crypto-Assets Regulation (EU) 2023/1114; Article 36(2) of that Regulation, which requires the reserve to be legally segregated from the issuer's estate so that the issuer's creditors have no recourse to it, has no counterpart in the DAA.

Proposed correction

Please clarify whether the reserve of assets is legally segregated from the issuer's estate and how it is distributed among holders if the issuer becomes insolvent, including how DAA 4.11.2 relates to COB 8.2.16. If protection is intended, the DAA could provide that the reserve is held on trust for holders and set out the order of distribution and a redemption plan.

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Rules on Digital Asset Activities (DAA), V5

Place

DAA 4.7.1(4), p.83

Record

Question of reading or data

Class

Question of reading or data

Where it arose

The text of the act

Arxo's conclusion

Confirmed

Official text

Unchanged at last check

Last checked

2026-10-25

Evidence

Contradiction within the text. Quotations are verbatim from the official material; translations are ours and marked.

must ensure that the reserve of assets is operationally segregated from the proprietary assets of the issuer

must ensure that the reserve assets held in custody are protected against claims of the custodian’s creditors

the reserve assets are not encumbered nor pledged as Collateral

must grant holders redemption rights at all times on the issuer of a Fiat stablecoin or Commodity stablecoin, and on the reserve assets when the issuer is not able to comply with its obligations

at least equal to the aggregate value of the claims on the issuer of a Fiat stablecoin or Commodity stablecoin from holders of Fiat stablecoins

are not depository liabilities or assets of the Digital Asset Trading Facility Operator and must be held on trust

does not include property of the company held in trust by the company upon trust

Excluded Property, in relation to a Company that is an Investment Intermediary, means

Debts other than preferential Debts rank equally between themselves in the winding up of a Company

provisions that prescribe procedures and priorities for dealing with assets of a licensed Company

sums received from, or for the benefit of, a Client for the execution of a Payment Transaction

The fiat currency held by the issuer would be considered as Client Money

carrying on of Investment Business or Provides Money Services in or from the AIFC must comply with COB 8.2

any Money remaining with the Authorised Firm must be paid to each Client in full or, where insufficient funds are held by the Authorised Firm, proportionately, in accordance with each Client’s valid claim over that Money

to the extent that these Rules are inconsistent with the AIFC Insolvency Regulations, these Rules will prevail

the rights or the absence of rights granted to the holders of Fiat stablecoins

with valid client agreements with the issuer of a Fiat stablecoin or Commodity stablecoin

has been required to implement a redemption plan

How to check it without Arxo's tools

1. Open AIFC Rules on Digital Asset Activities_V5 (with amendments as of 7 December 2025, which commence on 1 January 2026) and find DAA 4.7.1(4), p.83; DAA 4.7.3(7), p.86; DAA 4.7.3(1)(a), p.85; DAA 4.11.2(1), p.93; DAA 4.7.1(7), p.84; DAA 2.13.7(2), p.38 (neighbouring rule for Clients' Digital Assets); DAA 4.7.1, Guidance; DAA 4.5(1)(c), p.78; DAA 4.11.2(3), p.93; DAA 4.7.2(3)(b), p.84. Compare the text with the quotation above. A copy is kept in this register: 4a5174f747a66c22-daa_v5_01.01.2026.pdf (SHA-256 4a5174f747a66c222093a9cbd075c58816f1761b7a3b2807f86f9b98ccf28557, copy of the official file).
2. Open V3_AIFC Insolvency Regulations with amendments as of 27 December 2024, commence on 1 January 2025 and find Insolvency Regulations, Schedule 3, «Property of the company»; Insolvency Regulations s.100(2). Compare the text with the quotation above. A copy is kept in this register: 8c93c6f2c248880c-ireg_v3_14_01.01.2025.pdf (SHA-256 8c93c6f2c248880c488cbc24fd3462fa0b923eeaf240be33f71b6fb768a6efbe, copy of the official file).
3. Open V3_Insolvency Rules with amendments as of 15 December 2024, commence on 1 January 2025 and find Insolvency Rules, Schedule 4, «Excluded Property»; Insolvency Rules 5.46.1. Compare the text with the quotation above. A copy is kept in this register: 782ee782f649d901-ir_v3_gr0008_01.01.2025.pdf (SHA-256 782ee782f649d9016e95f69bd3c2128b4b4c7fa087f47fa6f8f053feefec0f8e, copy of the official file).
4. Open AIFC Rules on Providing Money Services (with amendments as of 13 April 2025, which commence on 13 October 2025 and on 13 January 2026) and find PMS 9.3(1)(a). Compare the text with the quotation above. A copy is kept in this register: 333935eb310b57bc-pms-rulebook-25.05.2025_-v.1.pdf (SHA-256 333935eb310b57bcba51ab477b3e11e65a88e7ccf094eda06bc4e023e4fdac1a, copy of the official file).
5. Open Conduct of Business Rules_V17 (with amendments as of 7 December 2025, which commence on 13 January 2026) and find COB 8.1.4 (Money Service Providers — COB 8.2); COB 8.2.16(2)(c); COB 8.2.16(1). Compare the text with the quotation above. A copy is kept in this register: ae99fece8c925210-cob_v17_13.01.2026-1.pdf (SHA-256 ae99fece8c92521046670bbcf56bf4176715e22ece4779e4ba8b461a631793c6, copy of the official file).
6. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI agents read the official texts, turned the provisions concerned into executable rules and ran the comparison; they also drafted this record. A person at Arxo checked the finding and approved the report before it was sent (2026-10-27).

Responsible institutions

• Astana Financial Services Authority (AFSA) — author of the AIFC Rules

Reported to

Responses

No response recorded.

Documents and reproduction

• AIFC Rules on Digital Asset Activities_V5 (with amendments as of 7 December 2025, which commence on 1 January 2026)
• V3_AIFC Insolvency Regulations with amendments as of 27 December 2024, commence on 1 January 2025
• V3_Insolvency Rules with amendments as of 15 December 2024, commence on 1 January 2025
• AIFC Rules on Providing Money Services (with amendments as of 13 April 2025, which commence on 13 October 2025 and on 13 January 2026)
• Conduct of Business Rules_V17 (with amendments as of 7 December 2025, which commence on 13 January 2026)

Related records

• ARXO-2026-0149 — Part 4 covers issuers of Commodity stablecoins, but authorisation (4.1) and capital (4.2) name only Fiat stablecoins

History

1. 2026-10-25Confirmed by Arxo
2. 2026-10-27Entered in the register
3. 2026-10-27Reported to Astana Financial Services Authority (AFSA) (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0171, https://arxo.io/findings/ARXO-2026-0171/ (status as of 2026-10-25). Data: ARXO-2026-0171.json.