Cryptocurrency Trading Is Illegal In Saudi Arabia, Officials Warn

News, Regulation | August 14, 2018 By:

A special standing committee in Saudi Arabia has warned that cryptocurrency trading is illegal in the country.

In a statement published on Sunday, the Standing Committee for Awareness on Dealing in Unauthorized Securities Activities in the Foreign Exchange Market declared it was against cryptocurrency trading. The committee assured that cryptocurrencies, such as bitcoin, are illegal in the kingdom and no parties or individuals are licensed for such practices.

“The committee warns all citizens and residents about drifting after such illusion and get-rich scheme due to the high regulatory, security and market risks involved, not to mention signing of fictitious contracts and the transfer of funds to unknown recipients/entities/parties,” the committee said.

The statement does not indicate what kind of penalties violators would face if caught trading in cryptocurrencies.

Formed by a supreme decree, the committee works with relevant parties in order to reduce marketing for investment and trading in forex and cryptocurrencies by reporting on the Saudi Arabian Monetary Authority (SAMA), the country’s central bank, or the Capital Market Authority (CMA). In addition to SAMA and CMA, the committee also includes the Ministry of Interior, the Ministry of Media, and the Ministry of Commerce and Investment.

The committee said investors who are in any doubt about what is permissible should refer to the relevant government entity’s website, which will provide all needed information about licensed entities.

Though no fan of bitcoin and other cryptocurrencies, SAMA is working on a joint project with the central bank of the United Arab Emirates to issue a digital token for cross-border transactions. The planned digital token will be underpinned by blockchain technology.

In February of this year, SAMA signed an agreement with blockchain firm Ripple to bring the company’s xCurrent software to Saudi banks in order to help them “instantly settle” cross-border payments. The partnership aligned with the creation of a regulatory sandbox for banks to test Ripple’s blockchain technology.