It’s against the law to trade cryptocurrencies in Saudi Arabia. In a statement published Sunday by the Saudi Arabian Monetary Authority (SAMA), the country’s de facto central bank, the ban is due to “their negative consequences and high risk on traders” since cryptocurrency trading is virtually unregulated and there are no protections in place for investors.
The committee that implemented the ban was created specifically to identify “unauthorized securities activities in the foreign exchange market.” The committee includes Saudi Arabia’s Capital Market Authority (CMA), the Interior, Media, Commerce and Investment ministries, as well as the SAMA.
The committee is tasked with informing authorities of any trading or investments in forex and cryptocurrency, as well as reducing their marketing activities to prevent investor activity.
The committee said in a statement:
“The committee assured that virtual currency including, for example but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices. “
While the committee has not released any specific penalties or fines for cryptocurrency trading, it warns “all citizens and residents” against what it terms ‘illegal’ activity.
Meanwhile, BitOasis, the first bitcoin exchange in the Middle East and North Africa (MENA), continues to list Saudi Arabia among its supported countries. This follows in the wake of its initial launch nearly two years ago. In May, BitOasis suspended fiat withdrawals citing an ‘issue’ with its banking partner. Since then, the exchange has reversed its tactics and announced that it will resume international fiat withdrawals.
The crypto trading ban is an interesting and somewhat perplexing move by SAMA, considering that it is working on creating its own custom cryptocurrency for blockchain-powered cross-border transactions with the central bank of the United Arab Emirates. Saudi Arabia’s central bank is using blockchain, specifically Ripple’s xCurrent (which doesn’t use XRP) to enable smaller regional banks to plug into RippleNet, an enterprise blockchain network for instant payments.