Saudi Arabia

## Report: Retail Cryptocurrency Trading Status in Saudi Arabia

**Report Date:** April 13, 2025

**Topic:** Retail_Trading_Status

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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### **Retail_Trading_Status**

**1. Identified Status:** **Gray-Zone**

**2. Detailed Narrative Explanation:**

The status of retail cryptocurrency trading (buying, selling, holding) for individual citizens and residents in Saudi Arabia is best described as a **Gray-Zone**. While there is no explicit law banning individual ownership or trading of cryptocurrencies, the regulatory environment is characterized by official warnings, a lack of specific regulations, and restrictions on financial institutions, creating ambiguity and risk for participants.

**Key Points:**

*   **Official Warnings:** The Saudi Central Bank (SAMA), the Capital Market Authority (CMA), and a standing committee involving multiple ministries have issued repeated warnings since 2018 against trading cryptocurrencies like Bitcoin. These warnings highlight the high risks involved, including volatility, potential for fraud, use in illicit activities (like money laundering and terrorism financing), and the lack of regulatory protection for investors within the Kingdom. The committee explicitly stated that virtual currencies are not approved as official currencies and no parties are licensed for such practices.
*   **No Explicit Ban on Individuals:** Despite the strong warnings, there is no specific legislation that explicitly prohibits individual citizens or residents from owning or trading cryptocurrencies. Sources indicate that there are currently no recognized legal penalties specifically for individuals engaging in crypto trading, although they operate without any official protection.
*   **Banking Restrictions:** A significant restriction is the prohibition placed on banks and licensed financial institutions within Saudi Arabia from processing cryptocurrency-related transactions. This makes it difficult for individuals to directly use the Saudi banking system to fund accounts on crypto exchanges or cash out holdings.
*   **Lack of Regulation and Licensing:** There is currently no specific regulatory framework or licensing regime for cryptocurrency exchanges or Virtual Asset Service Providers (VASPs) operating within Saudi Arabia targeting retail customers. While some sources mention the possibility of a "VASP license" emerging from recent Payment Service Provider regulations, this appears more focused on broader fintech activities and institutional applications rather than retail crypto exchanges. Major international exchanges like Binance do not hold local licenses, although discussions between regulators (SAMA, CMA, MCIT) and industry players (like Binance) about potential future regulatory frameworks are reportedly ongoing, with some hopeful for developments in 2024/2025.
*   **Prevalence of Trading:** Despite the warnings and banking restrictions, retail cryptocurrency trading appears to occur. Saudi citizens and residents reportedly use international exchanges (like Binance, Kraken, Coinbase) and regional platforms (like Rain, BitOasis) to trade, often finding ways around the banking restrictions (potentially via P2P methods or overseas accounts). Chainalysis data indicates significant crypto activity and growth in Saudi Arabia, with high interest in decentralized platforms.
*   **Official Stance vs. Practice:** The official stance remains highly cautious, emphasizing risks and lack of recognition. SAMA's Governor has reiterated concerns about risks to financial stability posed by cryptocurrencies. However, the lack of enforcement against individual traders and the continued use of international platforms create a gray area where the activity persists outside the formal, regulated financial system. Saudi Arabia is also exploring blockchain technology and a Central Bank Digital Currency (CBDC) through projects like "mBridge," indicating an interest in the underlying technology, separate from the unregulated status of existing cryptocurrencies.

**Conclusion:** The term "Gray-Zone" accurately reflects the situation. Retail trading is not explicitly illegal for individuals, but it is strongly discouraged by authorities, lacks regulatory oversight and protection, faces banking restrictions, and operates without licensed local exchanges. Individuals participating do so at their own risk, navigating an environment of official disapproval and regulatory uncertainty.

**3. Specific Text Excerpts:**

*   **SAMA (via Standing Committee, 2018):** "The committee assured that virtual currency including, for example but not limited to, the Bitcoins are not approved as official currencies in the kingdom and no parties or individuals are licensed for such practices by regulators in the kingdom. The committee warns all citizens and residents about drifting after such illusion and get-rich scheme due to the high regulatory, security and market risks involved..."
*   **Cointelegraph (April 2024):** "Crypto has quasi-legal status in Saudi Arabia. In 2018, the government restricted banks from assisting with any cryptocurrency-related transactions... At present, there are no recognized legal consequences for anyone who chooses to interact with digital assets of any kind."
*   **Library of Congress Blogs (Jan 2025):** "While individual ownership and trading of cryptocurrencies are not explicitly banned, they are not traded by local financial institutions as they are not recognized by legal entities in Saudi Arabia." and "As of December 2024, Saudi Arabia has not enacted specific legislation governing cryptocurrencies. While it is not explicitly prohibited, cryptocurrencies lack formal legal recognition and are operated under a risk-averse regulatory framework by the Saudi Central Bank... and the Capital Market Authority (CMA)."
*   **Journal of Ecohumanism (2025):** "In Saudi Arabia context of digital assets regulation lacks clarity and major cryptocurrencies such as Bitcoin are in a gray area without clear definitions yet... but there are no specific legal penalties for individuals engaging in digital asset trading. So, the government has also banned banks from processing crypto transactions..."
*   **Regtechtimes (March 2022):** "The government has placed an outright ban on banks processing any transactions involving cryptocurrencies. It has also declared cryptocurrency trading illegal in the country. Despite this statement, the government has not made any penalties clear for people choosing to still dabble in this trade... Hence, though the government has declared bitcoin to be illegal it has more of a quasi-legal status in the country."
*   **ICLG.com (July 2024):** "Saudi Arabia had not implemented specific regulations targeting cryptocurrencies or cryptoassets. While there are no regulations yet, SAMA is actively engaged in discussions with major industry players, such as Binance... to explore regulatory frameworks for digital currencies."
*   **Bitrawr (2025):** "Consumers can legally trade Bitcoin and other cryptocurrencies in Saudi Arabia but with no financial protections for any losses relating to the use of such cryptocurrencies. Financial institutions, like banks, are not permitted to deal with cryptocurrency, unless permitted by SAMA."
*   **Al Arabiya (Jan 2025):** "It is not permitted to trade cryptocurrencies in the Kingdom... Saudi Arabia prohibits banks from dealing with cryptocurrency transactions, but there is no legal penalty for individuals who own or trade cryptocurrencies." (Translated from Arabic)

**4. Direct URL Links:**

*   **SAMA Warning (Standing Committee, 2018):** https://www.sama.gov.sa/en-us/news/pages/news-8122018.aspx (Note: This link might be to the specific news item, verify accessibility) or via Hogan Lovells summary: https://www.hoganlovells.com/en/publications/digital-assets-and-blockchain-hub-latest-developments
*   **Cointelegraph Article (April 2024):** https://cointelegraph.com/news/legal-status-cryptocurrencies-saudi-arabia-qatar
*   **Library of Congress Blogs (Jan 2025):** https://blogs.loc.gov/law/2025/01/falqs-regulation-of-cryptocurrencies-in-the-gulf-cooperation-council-countries-part-one/
*   **Journal of Ecohumanism (2025):** https://ecohumanism.co.uk/joe/ecohumanism/article/view/6067 (Link to journal page, specific article access may require subscription)
*   **Regtechtimes Article (March 2022):** https://regtechtimes.com/saudi-arabia-legality-of-cryptocurrency/
*   **ICLG.com Fintech Report (July 2024):** https://iclg.com/practice-areas/fintech-laws-and-regulations/saudi-arabia
*   **Bitrawr Exchange Info (2025):** https://www.bitrawr.com/buy-bitcoin/saudi-arabia
*   **Al Arabiya Article (Jan 2025):** https://www.alarabiya.net/aswaq/special-stories/2025/01/26/%D9%87%D9%84-%D8%A3%D8%B4%D8%AA%D8%B1%D9%8A-%D8%B9%D9%85%D9%84%D8%A7%D8%AA-%D9%85%D8%B4%D9%81%D8%B1%D8%A9%D8%9F
*   **CMA Warnings (General):** https://cma.org.sa/en/Market/GetAwarenessMessages/Pages/default.aspx (General awareness page, specific crypto warnings may need searching) or via news reports like: https://www.proshareng.com/news/Cryptocurrency/Saudi-Arabia-Capital-Market-Authority-Warns-Investors-Against-Digital-Currency-Investment/38562 and https://www.finextra.com/pressarticle/72661/saudi-arabia-warns-on-cryptocurrencies
*   **SAMA Governor Statements (Oct 2023):** https://www.zawya.com/en/economy/saudi-arabia/saudis-sama-chief-warns-against-dangers-of-crypto-currencies-m9xb3x6e or https://www.argaam.com/ar/article/articledetail/id/1674796 (Arabic)
*   **Chainalysis Report Excerpt (Sept 2024):** https://www.chainalysis.com/blog/mena-crypto-market-geography-report-2024/