Libya

## Retail Trading Status: Libya

**Report Date:** 2025-06-26

**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).

### 1. Identified Current Status:
**Banned**

### 2. Detailed Narrative Explanation:

Retail cryptocurrency trading (buying, selling, and holding) is officially banned in Libya. The Central Bank of Libya (CBL) issued a directive in 2018 declaring virtual currencies illegal and stating that no legal protection would be provided to individuals using or trading them. This prohibition was primarily justified by concerns that cryptocurrencies could be used for illicit activities such as money laundering and financing terrorism, given their anonymity and the difficulty in determining their value.

Despite this official ban, there is evidence of ongoing cryptocurrency activity within Libya. Factors such as economic instability, limited access to traditional banking services, and a young, tech-savvy population have contributed to informal adoption. Bitcoin mining has also gained traction due to Libya's low electricity costs, although this has raised concerns about the strain on the national energy grid and has led to crackdowns on illegal mining operations.

While the 2018 CBL directive remains the primary stance, some sources indicate a "legal limbo" or "partial ban," suggesting that while investment is banned, the existing financial regulations are being adapted to monitor and regulate cryptocurrency transactions under Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) frameworks. There are also reports that the House of Representatives is working on regulations to address the crypto industry. The 2021 Cybercrime Law defines electronic money but does not explicitly prohibit cryptocurrency mining or trading, though engaging in such activities without CBL approval can lead to legal repercussions, especially if linked to other illicit activities or illegal electricity usage.

The Financial Information Unit (FIU) within the Central Bank of Libya is responsible for handling money laundering operations and receiving suspicious transaction reports from financial institutions. While there are no specific KYC/AML regulations tailored for cryptocurrency platforms due to the ban, general AML/CFT laws apply to financial activities.

The overall regulatory environment remains restrictive and unclear in practice, with the official ban contrasting with some level of persistent, albeit risky, informal activity. The government has also initiated educational programs in 2024 to inform stakeholders about the benefits and risks of cryptocurrencies, and some anticipate more precise regulations by 2025. However, as of the latest available information, the explicit ban on retail trading by the Central Bank remains the dominant legal reality.

### 3. Specific, Relevant Text Excerpts:

*   **Proelium Law LLP:** "Libya. Banned. The Central Bank of Libya announced that virtual currencies are illegal and that no legal protection will be afforded to anyone using or trading them."
*   **Baker McKenzie (2019, referencing early 2018 CBL announcement):** "In early 2018, the Central Bank of Libya announced that virtual currencies such as Bitcoin are illegal and that no legal protection will be afforded to anyone using or trading them. The Central Bank of Libya explained that virtual currencies were banned as “these currencies may be used to carry out criminal activities and violations of laws such as money laundering and financing of terrorism.”"
*   **Freeman Law (referencing 2018 CBL announcement):** "In 2018, the Central Bank of Libya announced that virtual currencies are illegal and that no legal protection will be afforded to anyone using or trading them."
*   **Qabas:** "Cryptocurrency, including Bitcoin, has been on a legal limbo in Libya since 2018. The Central Bank of Libya (CBL) enacted a partial ban on investing in cryptocurrencies, citing concerns over transaction anonymity and the lack of mechanisms to determine their value. Despite this prohibition, cryptocurrency usage persists, prompting the CBL and other financial regulatory bodies to adapt existing financial laws. These adaptations focus on monitoring and regulating cryptocurrency transactions under anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks."
*   **UPay Blog (March 13, 2025):** "Adoption Status: Cryptocurrency is illegal in Libya. The Central Bank of Libya has banned its use, and it is not recognized as legal tender or regulated as a digital asset."
*   **LibyaReview (February 20, 2025, quoting Al Jazeera Net):** "The CBL first issued a warning in 2018, banning cryptocurrency transactions due to security and financial risks, including money laundering and terrorism financing. The 2021 Cybercrime Law defines electronic money as “prepaid monetary value stored on an electronic device, not linked to a bank account.” However, it does not explicitly prohibit cryptocurrency mining or trading."
*   **LibyaReview (August 13, 2023):** "Since 2018, the Central Bank of Libya (CBL) imposed a ban on investing in cryptocurrencies."

### 4. Direct, Accessible URL Links to Sources:

1.  **Proelium Law LLP - Cryptocurrency Regulation Tracker:** [https://www.proeliumlaw.com/cryptocurrency-regulation-tracker/](https://www.proeliumlaw.com/cryptocurrency-regulation-tracker/) (Specific information for Libya found within the page)
2.  **Baker McKenzie - Blockchain and Cryptocurrency in Africa (PDF, information from 2019 referencing early 2018):** [https://www.bakermckenzie.com/-/media/files/insight/publications/2019/09/blockchain-and-cryptocurrency-in-africa.pdf](https://www.bakermckenzie.com/-/media/files/insight/publications/2019/09/blockchain-and-cryptocurrency-in-africa.pdf) (Page 26)
3.  **Freeman Law - Libya and Cryptocurrency:** [https://freemanlaw.com/libya-cryptocurrency-laws/](https://freemanlaw.com/libya-cryptocurrency-laws/)
4.  **Qabas - Crypto in Libya:** [https://qabas.ly/en/crypto-in-libya-all-you-should-know/](https://qabas.ly/en/crypto-in-libya-all-you-should-know/)
5.  **UPay Blog - Crypto Adoption Around the World: Libya (March 13, 2025):** [https://upay.co.uk/blog/crypto-adoption-around-the-world-libya/](https://upay.co.uk/blog/crypto-adoption-around-the-world-libya/)
6.  **LibyaReview - Libya Leads Arab World in Bitcoin Mining Despite Legal Uncertainty (February 20, 2025):** [https://libyareview.com/40290/libya-leads-arab-world-in-bitcoin-mining-despite-legal-uncertainty/](https://libyareview.com/40290/libya-leads-arab-world-in-bitcoin-mining-despite-legal-uncertainty/)
7.  **LibyaReview - Illegal Crypto Operation Uncovered in Libya (August 13, 2023):** [https://libyareview.com/35277/illegal-crypto-operation-uncovered-in-libya/](https://libyareview.com/35277/illegal-crypto-operation-uncovered-in-libya/)
8.  **AML Watcher - AML/CFT Compliance Guidelines for Libya:** [https://amlwatcher.com/aml-cft-country-information/libya/](https://amlwatcher.com/aml-cft-country-information/libya/)
9.  **UNODC warns that crypto mining can fund cybercrime - Crystal Intelligence (April 23, 2025):** [https://crystalblockchain.com/news/unodc-warns-that-crypto-mining-can-fund-cybercrime/](https://crystalblockchain.com/news/unodc-warns-that-crypto-mining-can-fund-cybercrime/)