Three Cambodian government bodies have jointly announced that the propagation, circulation, buying, selling, trading, and settlement of cryptocurrencies without obtaining a license are illegal activities. The agencies have also outlined four main risks associated with crypto trading or investing.
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License Needed
The National Bank of Cambodia (NBC), the Commission of Cambodia, and the General-Commissariat of National Police jointly made a statement regarding the legality of crypto activities in the country. It was signed on May 11 but published on Tuesday, June 19.
“Competent authorities have recently observed that cryptocurrencies such as Kh Coin, Suncoin, K Coin, Onecoin, Forex coin and other similar cryptocurrencies have been propagated, circulated, bought, sold, traded and settled actively in Cambodia,” the trio wrote, adding:
Competent authorities clarify that the propagation, circulation, buying, selling, trading and settlement of cryptocurrencies without obtaining license from competent authorities are illegal activities.
The authorities emphasized that “Any person or legal entity” engaged in any of the above activities without a proper license “shall be penalized in accordance with applicable laws.” However, the statement does not mention bitcoin or any crypto with a large market cap.
Regulators Outline Crypto-Related Risks
The statement continues to explain that the aforementioned crypto-related activities are not regulated by the authorities and “will cause potential risks to the public and society.”
The trio named four specific risks. Firstly, “The issuance of cryptocurrencies is not backed by collateral,” they wrote. Secondly, “Investment in cryptocurrencies may incur losses due to the volatility of its face value.” Then they claim there is a risk of “cybercrime and loss of funds due to the system being hacked.” Lastly, not only is there “no customer protection mechanism” with cryptocurrencies, but the regulators also noted the risks of money laundering and financing of terrorism since “the user of cryptocurrencies is an anonymous person who has no identity or historical records.”
The Cambodian Securities and Exchange Commission previously warned citizens of the risks of trading or investing in cryptocurrencies. In December, the NBC “reconfirmed its stand not to recognize digital currency bitcoin being introduced by some businesses in Cambodia,” the national press agency, AKP, wrote.
The central bank released a resolution in December to all banks and microfinance institutions in the country to ban the trading of cryptocurrencies including bitcoin, the Phnom Penh Post described, adding that, as a result:
Many of these financial institutions prevent customers from using their accounts to buy or sell digital coins or tokens.
What do you think of this statement by the three government bodies? Let us know in the comments section below.
Images courtesy of Shutterstock and the Cambodian government.
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