Lesotho

**Financial Regulatory Analyst Report: Retail Cryptocurrency Trading Status in Lesotho**

**Date:** April 13, 2025

**Topic:** Retail_Trading_Status

**Description:** Assessment of the legal and regulatory environment for individual citizens and residents in Lesotho regarding the buying, selling, and holding of cryptocurrencies, including relevant requirements and official warnings.

---

**1. Identified Current Status:** **Allowed-UnRegulated**

**2. Detailed Narrative Explanation:**

The current status of retail cryptocurrency trading (buying, selling, holding) for individuals in Lesotho is best described as **Allowed-UnRegulated**. There is no specific legislation or regulatory framework in Lesotho that explicitly governs cryptocurrencies or virtual assets. Key financial laws, such as the Financial Institutions Act, 2012, and the Central Bank of Lesotho Act, 2000, do not specifically address or regulate cryptocurrency activities. Cryptocurrencies do not fall under the legal definition of securities or legal tender within the existing framework.

While there is no explicit prohibition against individuals engaging in cryptocurrency transactions, the Central Bank of Lesotho (CBL) has issued warnings regarding the associated risks. These warnings emphasize that cryptocurrencies are not legal tender in Lesotho, are not overseen or regulated by the CBL, and that users engage in such activities at their own risk with no recourse to the Central Bank in case of losses. The CBL has specifically highlighted that cryptocurrency activities could potentially lead participants to violate existing laws, including:
*   Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) laws.
*   Tax laws (e.g., failure to declare income to the Revenue Service Lesotho).
*   Exchange control laws.

Promoting cryptocurrency investment opportunities is also problematic, as providing investment advice requires a license under the Central Bank of Lesotho Capital Market Regulations of 2014, which cryptocurrency promoters typically lack.

Therefore, while individuals are technically allowed to trade and hold cryptocurrencies due to the absence of a specific ban or crypto-focused regulations, they operate in an unregulated space. They must still ensure their activities comply with broader financial laws (AML/CFT, tax, exchange controls), failure of which could lead to legal consequences. The lack of specific crypto regulation means there are no dedicated consumer protection mechanisms, licensing requirements for exchanges operating locally (though international exchanges may be accessible), or specific KYC/AML protocols tailored to crypto platforms mandated by Lesotho authorities. The government has shown some interest in exploring blockchain technology, but this has not yet translated into a formal regulatory framework for cryptocurrencies themselves. Some sources indicate ongoing uncertainty and potential legal risks due to this lack of clarity.

**3. Supporting Excerpts:**

*   **Afriwise (Mayet & Associates):** "In Lesotho, cryptocurrency and other virtual assets are largely unregulated... while cryptocurrency trading is not explicitly prohibited, it may still present legal risks... there is no clear legal basis to classify cryptocurrency trading as illegal in Lesotho. However, individuals involved in cryptocurrency transactions must be cautious, as they may inadvertently breach tax, AML, and exchange control laws."
*   **Afriwise (Mayet & Associates):** "A key piece of legislation governing financial activities in Lesotho is the Financial Institutions Act, 2012. This law regulates both banking and non-banking financial institutions but does not explicitly cover cryptocurrency transactions. As a result, cryptocurrency trading falls outside the scope of traditional financial regulation. Similarly, the Central Bank of Lesotho Act and related regulations do not provide the CBL with direct authority to oversee cryptocurrency activities."
*   **Central Bank of Lesotho (Press Statement, Nov 9, 2017):** "The Central Bank of Lesotho hereby notifies and warns the public that it does not oversee, supervise or regulate the cryptocurrencies, their systems, promoters or intermediaries. Any activities related to the acquisition, trading or use of cryptocurrencies is at the user's sole and independent risk... in the event of losses or similar eventualities, there shall not be recourse to the Central Bank of Lesotho... cryptocurrencies expose participants to violation of: Anti-money laundering and combating of terrorist financing laws; Tax laws; and Exchange control laws."
*   **Webber Newdigate (June 22, 2021):** "Cryptocurrency/virtual assets remain largely unregulated under the laws of Lesotho... While the purchase and sale of cryptocurrency itself is not illegal, it may lead to the transgression of tax, money-laundering and exchange control laws, due to its nature as an unregulated asset."
*   **Kotigi.com (Oct 24, 2024):** "Lesotho, like many countries in Africa, has not yet developed a comprehensive regulatory framework specifically for cryptocurrencies. However, the absence of detailed legislation does not mean cryptocurrencies are illegal... The legal status of cryptocurrencies like Pi Network remains neutral, meaning that while not explicitly recognized, they are not banned either."
*   **Carlos Maiz Blog (Jan 2, 2025):** "As of now, Lesotho does not have specific regulations in place regarding cryptocurrencies. The country's financial authorities have not banned the use of cryptocurrencies, but there are no official guidelines or regulations either. This means that while cryptocurrencies are not illegal, they also lack clear legal status."
*   **UPay Blog (Dec 8, 2024):** "Cryptocurrency is legal but unregulated in Lesotho... The legal status of cryptocurrencies in Lesotho is unclear, leaving businesses and individuals uncertain about their rights and obligations." *(Note: While stating "legal but unregulated", it also mentions "unclear" status, reflecting the ambiguity arising from the lack of specific rules).*
*   **Freeman Law:** "In February 2018, the Central Bank of Lesotho released a statement declaring that cryptocurrencies are neither legal tender nor considered foreign currency... Promoting crypto investment opportunities is forbidden in Lesotho because investment advisors are required to have a license..." *(Note: While this source mentions a 2018 news article titled "Cryptocurrencies are illegal, CBL Warns", the primary CBL statements and legal analyses suggest non-regulation rather than an outright ban on holding/trading).*
*   **LEX Africa (quoting Webber Newdigate):** "The Central Bank of Lesotho (CBL) issued a press statement advising the public that it does not oversee, supervise or regulate cryptocurrencies and that in the event of losses there is no recourse to the CBL..."
*   **IMF (Nov 22, 2022):** *Contradictory Information:* "six countries—Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo—have banned crypto." *(Note: This IMF statement from 2022 contrasts with more recent legal analyses and CBL statements which indicate non-regulation rather than an explicit ban on holding/trading by individuals. The CBL warnings and lack of legal framework point towards Allowed-UnRegulated or possibly Unclear, rather than Banned).*
*   **IMF (Mar 27, 2024):** *Contradictory Information:* "Eighty percent of respondents [Sub-Saharan African central banks, excluding Lesotho which did not respond] report that people are not legally allowed to hold and transact in crypto assets..." *(Note: This survey result reflects a general trend but doesn't specifically confirm Lesotho's status, especially as Lesotho did not participate in this survey, and other sources contradict an outright ban).*

*Reconciliation Note:* While some sources (IMF 2022, Freeman Law referencing a news headline, general IMF 2024 survey) suggest a ban or illegality, the preponderance of evidence from legal analyses (Afriwise, Webber Newdigate), recent blogs citing the regulatory environment (Kotigi, Carlos Maiz, UPay), and the specific wording of Central Bank of Lesotho statements points towards a lack of regulation rather than an explicit legal prohibition on individuals holding or trading crypto. The CBL's focus is on the *risks* and *lack of oversight/recourse*, and the potential violation of *existing general laws* (AML, tax, exchange control), not on cryptocurrency activity being illegal *per se*. Therefore, 'Allowed-UnRegulated' appears the most accurate status, acknowledging the risks and lack of specific legal framework.

**4. Source URLs:**

*   **Afriwise (Mayet & Associates):** https://www.afriwise.com/insights/the-legal-status-of-cryptocurrency-in-lesotho
*   **Central Bank of Lesotho (Press Statement Nov 9, 2017 - referenced in other CBL pages):** [Direct PDF link not found in search, but content referenced here: https://www.centralbank.org.ls/index.php/articles] and [https://www.centralbank.org.ls/index.php/press-statement-on-the-emergence-and-promotion-of-cryptocurrencies]
*   **Webber Newdigate (Legal Firm):** https://www.webbernewdigate.co.ls/does-buying-cryptocurrency-make-you-a-criminal
*   **Kotigi.com:** https://kotigi.com/is-pi-network-legal-in-lesotho/
*   **Carlos Maiz Blog:** https://carlosmaiz.com/en/how-to-buy-cryptocurrencies-in-lesotho/
*   **UPay Blog:** https://upay.co.uk/blog/crypto-adoption-around-the-world-lesotho
*   **Freeman Law:** https://freemanlaw.com/lesotho-and-cryptocurrency/
*   **LEX Africa:** https://www.lexafrica.com/digital-currencies-and-services-gaining-momentum-across-the-continent/
*   **IMF Blog (Nov 2022 - Contradictory):** https://www.imf.org/en/Blogs/Articles/2022/11/22/africas-growing-crypto-market-needs-better-regulations
*   **IMF FinTech Note (Mar 2024 - Contradictory/General):** https://www.elibrary.imf.org/view/journals/061/2024/001/article-A001-en.xml
*   **Central Bank of Lesotho (General Articles/Statements):** https://www.centralbank.org.ls/index.php/articles

---
**Disclaimer:** This report is based on publicly available information accessed up to April 13, 2025. The regulatory landscape for cryptocurrencies can change rapidly. It is advisable to consult with legal professionals specializing in Lesotho's financial regulations for specific advice.