Cambodia

**Report on the Current Status of Retail Cryptocurrency Trading in Cambodia**

**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).

**Retail_Trading_Status**

**Status:** Gray-Zone

**Narrative Explanation:**

The status of retail cryptocurrency trading in Cambodia is best described as a "Gray-Zone" due to a complex and evolving regulatory landscape. While not explicitly banned for individuals, significant restrictions and a lack of a comprehensive, clear legal framework create an environment of uncertainty.

Historically, Cambodian authorities have expressed caution towards cryptocurrencies. In 2018, the National Bank of Cambodia (NBC), the Securities and Exchange Regulator of Cambodia (SERC, formerly SECC), and the General-Commissariat of National Police issued a joint statement prohibiting any activities related to cryptocurrencies without a license. This was followed by an NBC directive in 2019 banning financial institutions from engaging in crypto transactions. These actions effectively limited institutional participation and created a restrictive environment.

However, recent developments indicate a nuanced shift. In December 2024, the NBC issued Prakas B7-024-735 Prokor on Transactions Related to Cryptoassets. This Prakas allows commercial banks and payment settlement institutions, with prior NBC approval, to provide services related to "Group 1" crypto-assets. Group 1 assets are defined as tokenized traditional assets and stablecoins that meet specific criteria, such as being backed by traditional assets and having adequate stabilization mechanisms. Conversely, "Group 2" crypto-assets, which include unbacked cryptocurrencies like Bitcoin, remain largely restricted for these institutions. Banks are generally barred from direct exposure to Group 2 assets.

Crucially, this Prakas primarily addresses the activities of financial institutions and licensed Crypto Asset Service Providers (CASPs). While it mandates that entities involved in crypto asset transactions (fund mobilization, trading, settlements) must obtain a license, the direct implication for individual retail trading remains somewhat ambiguous. Some interpretations suggest that while financial institutions were banned from facilitating crypto transactions, this ban did not explicitly extend to individuals investing their own money, though it hindered institutional investment and formal regulation. Thomas Schings of Royal Group Exchange (RGX), a locally licensed digital asset exchange operating within SERC's FinTech Regulatory Sandbox, has stated that it is not illegal for Cambodians to trade or own digital assets.

Despite this, the environment for retail investors is shaped by several factors contributing to the "Gray-Zone" status:

*   **Blocking of Foreign Exchanges:** In November 2024, the Telecommunications Regulator of Cambodia (TRC) blocked access to numerous overseas cryptocurrency exchange websites, including major platforms like Binance and Coinbase, citing their operation without proper licenses. This action aims to direct users towards locally regulated platforms. However, reports suggest that mobile applications of these exchanges might still be accessible, and users can potentially bypass website restrictions using VPNs.
*   **Licensing Requirements for Service Providers:** The new NBC Prakas and existing SERC sandbox initiatives emphasize that any entity providing crypto-related services must be licensed. This means individuals trading through unlicensed platforms, especially foreign ones, are operating outside the envisioned regulatory framework.
*   **Focus on Regulated Local Platforms:** The government's strategy appears to be channeling crypto activity towards regulated domestic platforms like RGX, which operate under SERC's sandbox and are required to implement KYC/AML measures. RGX, for instance, requires full KYC and follows AML laws.
*   **Warnings and Investor Protection Concerns:** Authorities have consistently warned about the risks associated with cryptocurrency investments, including volatility, cybercrime, and the potential for money laundering and terrorism financing. The NBC advises the public to refrain from unauthorized crypto dealings.
*   **Ongoing Regulatory Development:** The legal framework is still evolving. The NBC is expected to issue further regulations regarding the conditions and procedures for CASP licensing. SERC is also working on developing a broader regulatory framework for digital assets. There appears to be some jurisdictional overlap or differing approaches between the NBC (focused on financial stability and payment systems) and SERC (focused on securities and market development), although a national roadmap reportedly designates SERC as the primary regulator for digital assets.
*   **AML/CFT Concerns:** There is a strong emphasis on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) in the emerging crypto regulations. Licensed entities will be subject to these requirements.

In summary, individual Cambodians are not explicitly prohibited by a clear law from buying, selling, or holding cryptocurrencies, particularly if done on their own account without involving domestic financial institutions in a prohibited manner. However, the government is actively moving to regulate the space, restrict access to unlicensed foreign platforms, and channel activity through licensed domestic CASPs that adhere to KYC/AML and other regulatory requirements. The distinction between permissible individual activity and prohibited unlicensed service provision, coupled with the ongoing development of comprehensive regulations, creates a gray area. Retail traders using unlicensed foreign platforms face risks related to a lack of local investor protection and potential future enforcement actions. Trading through locally licensed sandbox entities is permitted but is still part of a developing regulatory experiment.

**Relevant Text Excerpts and Sources:**

*   **National Bank of Cambodia (NBC), Securities and Exchange Regulator of Cambodia (SERC), and General-Commissariat of National Police Joint Statement (2018):**
    *   Summary: Prohibited any activities related to cryptocurrencies (circulation, trading, etc.) without a license from relevant authorities.
    *   Source: Widely reported by secondary sources like DFDL and Freeman Law. Original joint statement may not be easily accessible online.

*   **Prakas B7-024-735 Prokor on Transactions Related to Cryptoassets (December 26, 2024):**
    *   Quote: "The Prakas on Cryptoassets formally permits commercial banks and payment settlement institutions operating under the NBC supervision to provide services relating to crypto assets and, for commercial banks, to hold cryptoasset exposure, subject to prior approval from the NBC. Legal entities may also provide services relating to cryptoassets subject to receipt of license from the NBC."
    *   Quote: "The NBC classifies crypto assets into two categories. Group 1 crypto assets include tokenised traditional assets and stablecoins tied to real assets or pools of assets. Group 2 assets refer to all the other crypto assets, including unbacked crypto assets, such as bitcoin. Banks and payment service companies can only handle Group 1 crypto assets."
    *   Quote: "The directive, dated Dec. 26, mandates that individuals or entities involved in crypto asset transactions, such as fund mobilization, trading, and settlements, must obtain a license from the relevant authorities."
    *   Source: DFDL - https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-cryptoassets-regulation-introduced-by-the-national-bank-of-cambodia-nbc/, Central Banking - https://www.centralbanking.com/fintech/crypto-assets/7958936/cambodia-allows-banks-to-handle-stablecoins-and-backed-cryptos, Bitcoin.com News - https://news.bitcoin.com/cambodia-introduces-crypto-regulation-requiring-licensing-for-digital-asset-activities/, HKTDC Research - https://research.hktdc.com/en/article/MTY1Mjk0NDI1Mg, SokSiphana&associates - https://soksiphana.com/a-positive-move-toward-legalization-the-national-bank-of-cambodias-approach-to-governing-cryptoasset-businesses/

*   **Statement from Thomas Schings, Royal Group Exchange (RGX) (January 2024):**
    *   Quote: “First of all, let me clarify that there was never a full-on ban against crypto or digital assets in Cambodia. It’s not illegal to trade in cryptocurrencies or own digital assets in general and we have a lot of people who are already in that space. And what the NBC has done is setting out a directive for banks not to deal with any crypto-related businesses. So, banks are barred by the regulator to deal with the crypto space, but for Cambodians, it’s not outlawed. We must understand that for individuals dealing in digital assets is not illegal.”
    *   Source: Khmer Times - https://www.khmertimeskh.com/501424579/cambodia-set-to-become-hub-of-digital-assets-trade/

*   **Telecommunications Regulator of Cambodia (TRC) action (November 2024):**
    *   Summary: Blocked access to 16 major overseas cryptocurrency exchange websites for operating "without proper licenses and authorisations".
    *   Source: The Banker - https://www.thebanker.com/Comment-Profiles/Cambodia-s-crypto-interest-reflects-wider-policy-changes-to-financial-system, FULCRUM - https://fulcrum.sg/the-flawed-approach-of-cambodias-cryptocurrency-ban/, B2B Cambodia - https://www.b2b-cambodia.com/news/cambodia-blocks-access-to-16-major-crypto-exchange-websites/, Cointelegraph - https://cointelegraph.com/news/cambodia-bans-16-major-exchanges-including-binance-okx-and-coinbase

*   **Standard Insights (referencing earlier NBC stance):**
    *   Quote: "Although this ban [NBC directive of 2019 on financial institutions] does not apply to individuals willing to invest their money in cryptocurrency, it prevents any type of institutional investment or regulation from taking place."
    *   Source: Standard Insights - https://standardinsights.io/services/cryptocurrency-in-cambodia/

*   **Securities and Exchange Regulator of Cambodia (SERC) - FinTech Regulatory Sandbox:**
    *   Summary: SERC allows approved companies, like RGX, to operate digital asset exchanges within a sandbox environment, requiring KYC and AML compliance.
    *   Source: FULCRUM, B2B Cambodia - https://www.b2b-cambodia.com/news/overseeing-the-benefits-and-regulations-of-digital-assets-in-cambodia/, Khmer Times, SERC Website - https://www.serc.gov.kh/ (general information, sandbox details often in specific announcements).