Business 22 June 2018

Dennis Wafula

Cambodia requires license for crypto-related activities, authorities say

Three government agencies in Cambodia have issued a stern warning against cryptocurrency-related activities in the country. In a joint statement, the National Bank of Cambodia (NBC), the Commission of Cambodia, and the General-Commissariat of National Police announced that trading, selling, buying, circulation, propagation and settlement of cryptocurrencies are considered illegal.

In their warning, the Cambodian authorities zeroed in on cryptocurrencies like Forex coin, Kh Coin, Suncoin, K Coin and OneCoin, which they said “have been propagated, circulated, bought, sold, traded and settled actively in Cambodia.”

“Competent authorities clarify that the propagation, circulation, buying, selling, trading and settlement of cryptocurrencies without obtaining license from competent authorities are illegal activities,” according to the government agencies.

Cryptocurrency is a decentralized currency that has taken over the world by storm, and it is for this reason, that some governments have put legal frameworks in place to allow their citizens to trade in it. For Cambodia, the joint statement—signed last May 11, but was not made public until June 19—was the first from the governmentthat clearly outlined its stand on cryptocurrency-related activities.

There are several risks tied to crypto trading, according to the government agencies. Virtual currencies are not backed by collateral, and investing in the digital tokens runs the risk of incurring losses due to the volatility of its face value. Investors may also fall victim to potential cybercrime and losses of funds if the system is hacked.

“There is no customer protection mechanism and the user of cryptocurrencies is an anonymous person who has no identity or historical records, which may cause risks of money laundering and financing of terrorism,” the authorities said.

The three agencies warned that individuals or groups that buy, sell, trade or settle cryptocurrencies without obtaining the necessary license “shall be penalized in accordance with applicable laws.”

“The competent authorities appeal that the publics be cautious of the propagation to mobilize funds and the operations of buying, selling, trading and settlement of cryptocurrencies without obtaining license from competent authorities,” according to the statement.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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