Unclear application of the Client Money Rules to fiat currency held for Clients in Digital Asset Business

The Glossary defines Investment Business as a list of activities (a) to (k), "but not including Digital Asset Business", and Digital Asset Business includes Operating a Digital Asset Trading Facility and the other activities in relation to Digital Assets. COB 8.1.4 requires compliance with the Client Money Rules (COB 8.2) by a firm that holds Money for a Client "in the course of, or in connection with, the carrying on of Investment Business or Provides Money Services", and COB 8.2.1 defines Client Money by Investment Business. A Digital Asset Trading Facility Operator holds fiat currency for its Clients (DAA 2.13.4(2): a trade only if there are "sufficient Fiat Currencies or Digital Assets … in the Client's account"). Digital Assets of the same Clients "must be held on trust" (DAA 2.13.7(2), 3.7.1(3)), but no rule says the same of their fiat currency. The Rules of cooperation with second-tier banks require a Digital Asset Service Provider to hold Clients' money and its own money in separate accounts (rule 2.2.3), and DAA 2.13.7(7)(a) requires "segregation and portability arrangements". COB chapter 8 is listed among the applicable provisions only in Guidance to DAA chapters 2 and 3. It is therefore unclear whether this fiat currency is Client Money, whether the Client Money Distribution Rules in COB 8.2.16 apply to it if the firm fails (COB 8.1.2(c) brings in chapter 8 for a firm that Provides Custody, but not for a trading facility that uses a third-party wallet provider or for a broker), and whether it is Excluded Property under Schedule 4 of the Insolvency Rules. Example: a client deposits 20,000 USD with a Digital Asset Trading Facility Operator that uses a third-party wallet provider; the money is held in a separate account under rule 2.2.3; if the operator fails with a shortfall in that account, the Rules do not say how the shortfall is shared.

Proposed correction

Please clarify whether fiat currency held for Clients by Digital Asset Service Providers is Client Money, and if it is meant to be, apply the Client Money Rules to it, for example by a rule in the DAA or by adjusting the exclusion of Digital Asset Business for the purposes of COB 8.

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Glossary (GLO), V23

Place

Glossary, «Investment Business», p.26 (the exclusion follows the whole list (a)–(k))

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.

(k) Operating an Exchange, but not including Digital Asset Business.

Providing Money Services; and Operating a Digital Asset Trading Facility.

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

Provides Custody or Provides Money Services in or from the AIFC must comply with COB 8.3

carrying on of Investment Business in or from the AIFC is Client Money, except Money which is

sufficient Fiat Currencies or Digital Assets, which are admitted to trading, in the Client’s account with the Digital Asset Trading Facility Operator

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

have segregation and portability arrangements to effectively protect the Clients’ assets

Digital Asset Service Providers shall hold Сlients money and its own money in separate accounts.

A Digital Asset Trading Facility Operator is an Authorised Firm to which provisions of the Constitutional Statute, FSFR, GEN, COB, AML, and MAR are applicable

(c) Provides Custody in or from the AIFC.

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

if any AFSA Rules relating to the holding by Investment Intermediaries of Money belonging to third parties apply in relation to the Company

How to check it without Arxo's tools

1. Open AIFC Glossary (GLO), V23 and find Glossary, «Investment Business», p.26 (the exclusion follows the whole list (a)–(k)); Glossary, «Digital Asset Business», p.16. Compare the text with the quotation above. A copy is kept in this register: 041617346ad87a9f-glo-v23.pdf (SHA-256 041617346ad87a9ff3634eff95b3b92f65ee5f4965298a2c1137b8b9a8374b45, copy of the official file).
2. 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; COB 8.1.4 (second paragraph); COB 8.2.1; COB 8.1.2(c); COB 8.2.16(2)(c). 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).
3. Open AIFC Rules on Digital Asset Activities_V5 (with amendments as of 7 December 2025, which commence on 1 January 2026) and find DAA 2.13.4(2), p.37; DAA 2.13.7(2), p.38; DAA 2.13.7(7)(a), p.39; DAA chapter 2, Guidance (list of applicable provisions, incl. COB chapter 8). 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).
4. Open Rules and mechanisms of cooperation of Unbacked Digital Asset Exchanges and/or Centre Participants authorized to carry out digital assets-related activities with second-tier bank of the Republic of Ka and find Rules of cooperation with second-tier banks, 2.2.3. Compare the text with the quotation above. A copy is kept in this register: fdae78fa000df953-rules-of-cooperation-between-datfs-dasps-and-second-tier-banks-of-kazakhstan.pdf (SHA-256 fdae78fa000df953b46f14532a045d8ece13715191fae067b45554b2d12509c0, copy of the official file).
5. Open V3_Insolvency Rules with amendments as of 15 December 2024, commence on 1 January 2025 and find Insolvency Rules, Schedule 4, «Excluded Property»(b). 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).
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 Glossary (GLO), V23
• Conduct of Business Rules_V17 (with amendments as of 7 December 2025, which commence on 13 January 2026)
• AIFC Rules on Digital Asset Activities_V5 (with amendments as of 7 December 2025, which commence on 1 January 2026)
• Rules and mechanisms of cooperation of Unbacked Digital Asset Exchanges and/or Centre Participants authorized to carry out digital assets-related activities with second-tier bank of the Republic of Ka
• V3_Insolvency Rules with amendments as of 15 December 2024, commence on 1 January 2025

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-2026-0172, https://arxo.io/findings/ARXO-2026-0172/ (status as of 2026-10-25). Data: ARXO-2026-0172.json.