Authorities in Cambodia have announced that domestic investors are now required to obtain a license in order to purchase, sell or trade cryptocurrencies – activities that would be otherwise regarded as illegal.
In a joint statement signed on May 11 and published on Tuesday, the National Bank of Cambodia (NBC), the Securities and Exchange Commission of Cambodia and the General-Commissariat of National Police said that the decision was made after observing a growth in cryptocurrency trading in the country.
Suggesting that such activities “will cause potential risks to the publics [sic] and society as a whole,” the statement declares:
“Competent authorities clarify that the propagation, circulation, buying, selling, trading and settlement of cryptocurrencies without obtaining license from competent authorities are illegal activities.”
The statement further says that failure to obtain a license for the above activities “shall be penalized in accordance with applicable laws.”
The three agencies go on to explain that involvement with cryptocurrencies can bring investor risk arising from price volatility, cybercrime, and a lack of consumer protections, further listing several crypto projects – including the alleged Ponzi scheme OneCoin – as examples.
So far it isn’t clear just what license needs to be applied for, or what would be required for a successful application, but the requirement is likely to present a notable barrier for investors.
The joint statement marks a notable widening of a ban issued by the NBC in December 2017 that prohibited domestic financial institutions from offering account services to cryptocurrency investors and traders, according to an earlier report from Phnom Penh Post.
Since then, cryptocurrency related projects such as initial coin offerings (ICOs) and crypto trading activities continued to operate in a gray area, as regulators had yet to publish an explicit legal framework providing clarity for users of the nascent technology.
NBC image via Shutterstock