Cook Islands

**Report: Retail Cryptocurrency Trading Status in the Cook Islands**

**Date:** April 12, 2025

**Topic:** Retail_Trading_Status

**Description:** This section assesses the legal permissibility for individual citizens and residents in the Cook Islands to buy, sell, and hold cryptocurrencies, detailing the surrounding regulatory environment, including KYC/AML requirements and official warnings.

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

**2. Detailed Narrative Explanation:**

Based on available information, retail cryptocurrency trading (buying, selling, holding by individuals) appears to be **Allowed-UnRegulated** in the Cook Islands. There is no specific legislation or regulation identified that explicitly prohibits residents from participating in cryptocurrency activities. However, there is also a distinct lack of a dedicated regulatory framework governing cryptocurrency exchanges, brokers, or related services specifically targeting retail consumers within the Cook Islands.

The Cook Islands Financial Supervisory Commission (FSC) is the primary regulator for financial services. Its mandate covers banks, insurers, money-changing and remittance businesses, trustee companies, and international companies. While the FSC actively issues warnings about unlicensed entities, particularly in the forex trading space (some falsely claiming FSC authorisation and using "crypto" in their names), there is no indication that the FSC currently licenses or specifically regulates cryptocurrency exchanges or platforms for retail trading purposes. The existing legislation administered by the FSC does not appear to include specific provisions for digital assets or cryptocurrencies in the context of retail trading platforms.

A 2019 report suggested that certain crypto-related businesses, like Crypto CFD (Contract for Difference) brokerages, might operate outside the scope of existing financial regulations in the Cook Islands. While potentially dated, this aligns with the current lack of evidence for a specific crypto regulatory regime.

It is important to note the recent introduction of the "Tainted Cryptocurrency Recovery Bill 2023". This controversial bill focuses on establishing mechanisms to identify, seize, and forfeit cryptocurrency deemed "tainted" (linked to illicit activities), potentially involving extraterritorial actions like hacking. This legislation, however, is aimed at combating financial crime involving crypto assets and setting up recovery processes, rather than regulating the day-to-day retail trading market or licensing service providers for ordinary consumers. Its existence highlights governmental awareness of cryptocurrency but does not constitute a regulatory framework for legitimate retail trading.

Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regulations are in place in the Cook Islands, overseen by the Financial Intelligence Unit (FIU) and the FSC for its licensees. Licensed entities, such as trustee companies (which are prominent in the Cook Islands' offshore financial sector and may be involved in structures holding various assets, potentially including crypto for international clients), are subject to KYC (Know Your Customer) and AML/CFT obligations. However, it is unclear how or if these AML/CFT requirements are specifically applied to standalone cryptocurrency exchanges or brokers that might serve Cook Islands residents, given the apparent lack of a licensing framework for such entities.

In summary, while individuals are not legally barred from engaging with cryptocurrencies, the activity occurs in an environment lacking specific regulations for consumer protection, platform licensing, or operational standards tailored to the crypto sector for retail participants. The focus of authorities appears to be on AML/CFT compliance within already regulated sectors (like trust companies) and addressing illicit uses of crypto through specific initiatives like the Tainted Cryptocurrency Recovery Bill, rather than establishing a comprehensive framework for the retail crypto market.

**3. Relevant Text Excerpts:**

*   **On Lack of Specific Regulation for Crypto Brokerages (as of 2019):**
    > "Then, there are jurisdictions where conducting an offshore Crypto CFD Brokerage business may not fall under regulation, such as Saint Vincent and The Grenadines, Cook Islands, Nevis, or Marshall Islands, among others."
    *   **Source:** Flag Theory (2019)

*   **On FSC Warnings (Focus on Forex, not Crypto Exchanges):**
    > "Crypto Coin Vent, a forex trading company, claims to be authorised and regulated by the Cook Islands Financial Supervisory Commission. This statement is false and misleading. Crypto Coin Vent has never been licensed or regulated by the Cook Islands Financial Supervisory Commission, nor has it ever applied to be." (Similar warnings exist for other forex entities).
    *   **Source:** Financial Supervisory Commission - Cook Islands, Public Notices

*   **On the Tainted Cryptocurrency Recovery Bill's Focus:**
    > "The Tainted Cryptocurrency Recovery Bill allows for 'recovery agents' to use a variety of means including hacking to investigate and find cryptocurrency that may have been used for illegal means or is the proceeds of crime. Suspected international assets would be seized and eventually turned into cash."
    *   **Source:** 1News (April 14, 2024)

*   **On AML/KYC for Licensed Trustee Companies:**
    > "Reputable trustee companies in the Cook Islands want to protect their standing as a legitimate business and thus conduct Know Your Customer (KYC) and AML/CFT checks on settlors attempting to establish trusts with them... This means any trustee who is an individual person or trustee company/firm of a Cook Islands Trust is required to be licensed by the FSC, is supervised by the FSC, and must follow AML/CFT system guidelines."
    *   **Source:** Blake Harris Law (August 10, 2022)

*   **On the Scope of the Tainted Cryptocurrency Recovery Bill:**
    > "An Act having extraterritorial effect and providing for the systematic identification of cryptocurrency that is tainted by proscribed conduct, to allow for its seizure and forfeiture in certain circumstances, and to provide for restitutionary claims and asset-sharing in respect of that cryptocurrency in the Cook Islands.”
    *   **Source:** Cook Islands News (quoting the Bill, December 16, 2023)

**4. Source URLs:**

*   **Financial Supervisory Commission - Public Notices:** `https://www.fsc.gov.ck/index.php/public-notices` (Archived general link, specific notices may change)
*   **Financial Supervisory Commission - Legislation:** `https://www.fsc.gov.ck/index.php/regulatory-framework/legislation`
*   **Flag Theory - How to set up a regulated Bitcoin / Crypto CFD Brokerage (2019):** `https://flagtheory.com/regulated-crypto-cfd-brokerage/`
*   **1News - 'Spy film type thing' - Alarm grows over Cook Islands cryptocurrency bill (April 14, 2024):** `https://www.1news.co.nz/2024/04/14/spy-film-type-thing-alarm-grows-over-cook-islands-cryptocurrency-bill/`
*   **Blake Harris Law - Are Cook Islands Trusts Safe? (August 10, 2022):** `https://blakeharrislaw.com/blog/are-cook-islands-trusts-safe`
*   **Parliament of the Cook Islands - Bills (Tainted Cryptocurrency Recovery Bill 2023 listed):** `https://parliament.gov.ck/bills`
*   **Cook Islands News - Considering the 2023 Tainted Cryptocurrency : Recovery Bill Civil liberties, privacy and due process (December 16, 2023):** `https://www.cookislandsnews.com/economy/national/weekend/considering-the-2023-tainted-cryptocurrency-recovery-bill-civil-liberties-privacy-and-due-process/`

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**Disclaimer:** This report is based on publicly available information accessed up to the date indicated. Regulatory landscapes can change rapidly. It is advisable to consult local legal or financial experts for the most current and specific advice.