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Western Sahara

Retail_Trading_Status

Banned Unknown
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Analysis ID
#157
Version
Archived
Created
2025-04-12 06:52
Workflow Stage
Live

Executive Summary

Retail cryptocurrency trading in Western Sahara is currently 'Banned,' primarily due to the application of Moroccan law in the majority of the territory. Bank Al-Maghrib, the central bank of Morocco, maintains a prohibition on cryptocurrency transactions, with penalties for violations, dating back to 2017. While a draft law to regulate crypto-assets is under development, the existing ban remains in effect. The SADR claims to offer crypto licenses, but its practical ability to regulate is limited.

Key Pillars

The key regulatory pillars in Western Sahara are defined by the dominant role of Moroccan regulations in most of the territory. Bank Al-Maghrib, the central bank of Morocco, is the primary regulator, enforcing a ban on cryptocurrency transactions. Core compliance requirements, like AML/KYC, are mentioned in the context of the SADR's purported licensing regime. There are no clear licensing or registration requirements within the Moroccan-administered areas, as crypto activities are prohibited.

Landmark Laws

The key legislation is the statement from the Moroccan Ministry of Economy and Finance, Bank Al-Maghrib, and the AMMC in November 2017, along with the Foreign Exchange Office (Office des Changes) declaration at the same time. These pronouncements effectively banned cryptocurrency transactions and stipulated penalties under existing laws.

Considerations

Cryptocurrencies are treated as a violation of foreign exchange regulations in Morocco, leading to penalties. The primary risk identified by Moroccan regulators is the circumvention of exchange controls. Operational challenges include the lack of fiat on-ramps and off-ramps and currency controls imposed by Morocco in the areas it administers. There are claims about a 'Central Reserve Authority of Western Sahara' issuing crypto licenses, but its actual authority is uncertain.

Notes

Morocco's ongoing development of a draft law to regulate crypto-assets suggests a potential shift in the future. The SADR's claims of issuing crypto licenses are uncertain due to limited practical authority. Reports indicate that cryptocurrency use continues despite the ban, indicating the presence of informal or underground markets. The limited accessibility of sources detailing the SADR's regulatory environment highlights the incomplete clarity surrounding this aspect.

Detailed Explanation

The retail trading status of cryptocurrencies in Western Sahara is 'Banned' due to the territory's complex political situation. The majority of Western Sahara is administered by Morocco, where a strict stance against cryptocurrencies has been in place since 2017. In November 2017, the Moroccan Ministry of Economy and Finance, Bank Al-Maghrib, and the Moroccan Capital Market Authority (AMMC) jointly warned against virtual currencies, while the Foreign Exchange Office (Office des Changes) declared that virtual currency transactions infringe exchange regulations and are subject to penalties. This effectively bans the use, holding, and trading of cryptocurrencies within Moroccan-administered areas of Western Sahara. Despite this ban, cryptocurrency use persists underground. Bank Al-Maghrib is developing a draft law to regulate crypto-assets, with support from the World Bank and IMF, but as of early 2025, this law is still in the 'adoption process' and the 2017 ban remains in effect. Moroccan authorities have also investigated the use of crypto to purchase property abroad, indicating ongoing enforcement against circumventing exchange controls. The Sahrawi Arab Democratic Republic (SADR) controls a smaller portion of Western Sahara. While some sources mention a 'Central Reserve Authority of Western Sahara' purportedly issuing crypto licenses with KYC/AML requirements and local office presence, its practical regulatory capability is questionable given the political conflict and limited infrastructure. Therefore, the dominant legal framework in the Moroccan-administered areas results in a 'Banned' status for retail cryptocurrency trading in Western Sahara.

Summary Points

**Retail Cryptocurrency Trading in Western Sahara: Regulatory Analysis**

**I. Overall Regulatory Status:**

*   **Banned:** Retail cryptocurrency trading is effectively banned in Western Sahara due to the application of Moroccan law in the majority of the territory.

**II. Key Regulatory Bodies and Their Roles:**

*   **Moroccan-Administered Areas:**
    *   **Ministry of Economy and Finance, Bank Al-Maghrib (Central Bank), Moroccan Capital Market Authority (AMMC):** Issued joint statement in 2017 warning against virtual currencies.
    *   **Foreign Exchange Office (Office des Changes):** Declared crypto transactions an infringement of exchange regulations, subject to penalties (2017).
*   **SADR-Administered Areas:**
    *   **Central Reserve Authority of Western Sahara (Purported):** Some sources claim this body issues crypto licenses, but its practical authority and enforcement capability are uncertain.

**III. Important Legislation and Regulations:**

*   **Moroccan Law (Applicable in Moroccan-Administered Areas):**
    *   **2017 Ban:** Effectively prohibits the use, holding, and trading of cryptocurrencies.
    *   **Foreign Exchange Regulations:** Crypto transactions are considered a breach, subject to penalties.
*   **Draft Law (Under Development in Morocco):**
    *   Bank Al-Maghrib has prepared a draft law to regulate crypto-assets, with support from the World Bank and IMF.
    *   Status: "In the adoption process" as of early 2025; not yet implemented.

**IV. Requirements for Compliance (Hypothetical/Future - Pending Moroccan Law):**

*   **SADR Licensing (Uncertain Applicability):**
    *   If the "Central Reserve Authority of Western Sahara" is considered, requirements may include:
        *   Director/shareholder details
        *   KYC/AML procedures
        *   Local office presence
    *   *Note:* The practical enforceability of these requirements is highly questionable.

**V. Notable Restrictions or Limitations:**

*   **Moroccan-Administered Areas:**
    *   **Complete Ban:** Use, holding, and trading of cryptocurrencies are prohibited.
    *   **Enforcement:** Authorities actively investigate and penalize individuals circumventing exchange controls via crypto (e.g., purchasing property abroad).
*   **SADR-Administered Areas:**
    *   **Limited Governance:** Political conflict and limited infrastructure hinder effective regulation and enforcement.
    *   **Unclear Regulatory Framework:** While some sources mention licensing, the *de facto* situation is ambiguous.

**VI. Recent Developments or Changes:**

*   **Moroccan Regulatory Development:**
    *   Bank Al-Maghrib is actively working on a new regulatory framework for crypto-assets.
    *   Draft law is "in the adoption process" (as of early 2025).
*   **Enforcement Actions:**
    *   Moroccan authorities are actively cracking down on the use of crypto to circumvent exchange controls.

Full Analysis Report

Okay, here is the comprehensive report on the current status of Retail Cryptocurrency Trading in Western Sahara, structured as requested.

```python
Report on the Retail Trading Status of Cryptocurrencies in Western Sahara

Topic: Retail_Trading_Status
Description: Assessment of whether individual citizens and residents in Western Sahara are legally permitted to buy, sell, and hold cryptocurrencies, including details on the regulatory environment (e.g., KYC/AML requirements, official warnings).

1. Current Status: Banned (with significant complexity due to political status)

2. Detailed Narrative Explanation:

The legal status of retail cryptocurrency trading in Western Sahara is intrinsically linked to its complex and disputed political situation. The territory is largely administered by the Kingdom of Morocco, while a smaller portion is controlled by the Sahrawi Arab Democratic Republic (SADR), represented by the Polisario Front.

  • Moroccan-Administered Areas: In the vast majority of Western Sahara controlled by Morocco, Moroccan law applies. Moroccan authorities have maintained a strict stance against cryptocurrencies since 2017. In November 2017, the Ministry of Economy and Finance, Bank Al-Maghrib (the central bank), and the Moroccan Capital Market Authority (AMMC) issued a joint statement warning against the use of virtual currencies. Concurrently, the Foreign Exchange Office (Office des Changes) declared that transactions involving virtual currencies constitute an infringement of exchange regulations and are subject to penalties under existing laws. This effectively constitutes a ban on the use, holding, and trading of cryptocurrencies for individuals within the jurisdiction of Moroccan law, which includes most of Western Sahara. Despite this ban, reports indicate continued, albeit underground or illicit, use of cryptocurrencies within Morocco and potentially the areas of Western Sahara it administers. Recent reports (late 2024) indicate that Bank Al-Maghrib has prepared a draft law aimed at regulating and potentially legalizing crypto-assets, developed with support from the World Bank and IMF. However, as of early 2025, this law is still reported as being "in the adoption process" or "undergoing adoption" and has not yet replaced the 2017 ban. Until this new regulatory framework is formally adopted and implemented, the effective status remains Banned. Authorities have also recently (early 2025) investigated Moroccans using crypto to purchase property abroad, highlighting the ongoing enforcement against circumventing exchange controls via crypto.

  • SADR-Administered Areas: The SADR controls a smaller, less populated part of Western Sahara. While the SADR has a constitution and claims statehood (recognized by some nations and the African Union, but not the UN as a whole or Morocco), its capacity to implement and enforce complex financial regulations like those for cryptocurrencies across the territory it controls is highly questionable. Some sources (consultancy/advisory firms) mention a "Central Reserve Authority of Western Sahara" purportedly issuing crypto licenses for the SADR, outlining requirements like director/shareholder details, KYC/AML procedures, and local office presence. However, the de facto ability of this authority to regulate effectively on the ground, given the political conflict, limited infrastructure, and focus on the independence struggle, is unclear and likely minimal. There is no evidence of widespread, regulated retail crypto activity originating from or specifically sanctioned within these areas under a distinct SADR framework that is practically enforced.

  • Conclusion: For the majority of individuals residing and conducting economic activity in Western Sahara (i.e., in the Moroccan-administered parts), Moroccan regulations apply, which currently ban cryptocurrency transactions. While Morocco is actively working on a new regulatory framework that may legalize and regulate crypto, the ban instituted in 2017 remains the de jure and de facto status until the new law is passed and implemented. The situation in SADR-controlled areas is ambiguous regarding formal regulation, but practical implementation and significant retail activity seem highly unlikely due to governance challenges. Therefore, considering the dominant legal framework applicable to most of the population and economic activity, the most accurate status reflecting the current enforceable legal reality is Banned.

3. Specific Relevant Text Excerpts/Summaries:

  • Moroccan Ban (2017): "In November 2017, the Office des Changes, responsible for regulating currency exchange in Morocco, issued a public statement declaring that transactions involving virtual currencies were illegal and subject to penalties under existing laws." (Summarized from multiple sources reporting on the 2017 ban, e.g., The Paypers, CryptoNews).
  • Persistence of Ban (Early 2025): "At first glance, what's happening in the United States seems far from impacting Morocco, as the use of cryptocurrencies has been formally banned in the country since 2017. For the Office des Changes, all « transactions carried out via virtual currencies constitute a breach of foreign exchange regulations, subject to sanctions and fines »" (Direct quote summary from TelQuel, Dec 2024). "No, crypto trading and the use of cryptocurrencies in transactions are currently illegal in Morocco. The government has imposed a ban, and violators may face penalties." (Summary from Bitcoin.com guide, referencing 2025 status). "Cryptocurrencies are banned in Morocco since 2017, and its usage has been criminalized." (Summary from Mariblock, Feb 2025).
  • Ongoing Regulatory Development (Late 2024/Early 2025): "Abdellatif Jouahri, the governor of Bank Al-Maghrib, announced that the bank “has prepared a draft law regulating cryptoassets” with the support of the World Bank, and “which is currently in the adoption process”." (Summarized from African Law & Business, Nov 2024). "The Bank al-Maghrib's governor, Abdellatif Jouahri, recently told an international conference in Rabat that the bank had prepared a draft law regulating crypto assets and that this law was 'in the adoption process.'" (Summarized from Menas Associates, Nov 2024). "The proposed laws will first go through public discussions before heading to Morocco's parliament and cabinet for approval. If passed, Morocco will become one of the first developing countries to establish clear crypto regulations." (Summarized from CoinGape, Dec 2024).
  • SADR Licensing Claims: "The regulatory body that oversees the licenses of cryptocurrencies in the jurisdiction of Western Sahara is the Central Reserve Authority of Western Sahara. It was specifically created to control and oversee financial services. This ranges from licensing cryptocurrency activities to supervising them." (Excerpt from Tetra Consultants). "Western Sahara Management and Advisory Corporation is glad to introduce new service for our clients – Crypto license (by the Central Reserve Authority of Western Sahara, SADR)." (Excerpt from SADR Management and Advisory Corporation). Analyst Note: The practical authority and enforcement capability of this body remain uncertain.
  • Application of Moroccan Law: "As Western Sahara is a disputed territory largely administered by Morocco, Moroccan financial laws and regulations, including the prohibition on cryptocurrency transactions, apply within the administered areas." (Analyst synthesis based on political context and Moroccan regulations).

4. Direct URL Links to Sources:

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