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Executive Summary

Key Pillars

Landmark Laws

**Central Bank and Banking System Law No. 194 of 2020** (Law No. 194/2020) - Enacted: 2020-09-15
  - Article 206 explicitly prohibits issuing, trading, promoting, or operating platforms for cryptocurrencies without a license from the CBE. Article 225 establishes penalties including imprisonment and fines up to EGP 10 million for violations.
  - [Source](https://www.cbe.org.eg/en/Pages/Banking-Laws.aspx)

**Dar al-Ifta Religious Decree (Fatwa)** (Fatwa No. 4205) - Enacted: 2018-01-01
  - The Grand Mufti of Egypt declared cryptocurrency trading 'Haram' (forbidden) under Islamic law due to risks of fraud, lack of central authority, and potential for funding illicit activities.
  - [Source](https://www.dar-alifta.org/)

**CBE Warning Statement on Cryptocurrencies** (Circular/Warning Statement) - Enacted: 2023-03-08
  - Reiterated that no licenses have ever been issued for crypto activities and warned that dealing in them is a legally criminalized activity punishable by law.
  - [Source](https://www.cbe.org.eg/en/news-publications/news/2023/03/08/09/00/warning-statement-on-cryptocurrencies)

Considerations

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Detailed Explanation

Retail cryptocurrency trading is effectively illegal and banned in Egypt. This prohibition stems from the Central Bank and Banking System Law No. 194 of 2020, enacted on September 15, 2020. Article 206 of this law explicitly criminalizes the issuance, trading, promotion, or operation of platforms for cryptocurrencies without a license from the Central Bank of Egypt (CBE), the primary regulator. The legal framework is reinforced by a religious decree from Dar al-Ifta, which issued Fatwa No. 4205 on January 1, 2018, declaring cryptocurrency trading 'Haram' or forbidden under Islamic law due to associated risks. The Public Prosecution is the body responsible for enforcing these criminal penalties against violators. Despite the law theoretically allowing for licensed crypto activities, the CBE has maintained a complete refusal to issue any such licenses, a stance it reiterated in a formal Warning Statement on March 8, 2023. This creates a unique regulatory environment where a licensing mechanism exists in law but is intentionally unused, resulting in a de facto total ban backed by de jure criminal penalties for all unlicensed activity. The penalties for violation are severe. Under Article 225 of Law No. 194/2020, individuals engaged in unauthorized crypto activities face imprisonment and fines of no less than 1 million Egyptian Pounds (approximately $20,000 USD) and up to 10 million EGP. This active enforcement is demonstrated by cases such as the 'HoggPool' crackdown in 2023. Consequently, the combination of an unyielding regulatory freeze from the CBE, stringent criminal statutes, a religious prohibition, and active law enforcement makes any cryptocurrency trading operation by retail users or unauthorized entities a high-risk, illegal activity in Egypt.

Bullet Points

**I. Regulatory Status**
*   Retail cryptocurrency trading is *effectively illegal and banned* in Egypt.
*   The legal framework provides a licensing mechanism that is intentionally unused by the regulator, creating a *de facto total ban*.
*   All unauthorized issuance, trading, and promotion of cryptocurrencies are *criminal offenses*.

**II. Key Regulatory Bodies**
*   **Central Bank of Egypt (CBE)**: The primary financial regulator; holds exclusive licensing authority under the law but has refused to issue any licenses.
*   **Dar al-Ifta**: The national religious authority that issued a fatwa declaring cryptocurrency trading 'Haram' (forbidden).
*   **Public Prosecution**: The entity responsible for enforcing criminal penalties against violators of the banking law.

**III. Important Legislation**
*   **Central Bank and Banking System Law No. 194 of 2020 (Law No. 194/2020)**:
    *   Enacted: September 15, 2020.
    *   Article 206 prohibits issuing, trading, promoting, or operating platforms for cryptocurrencies without a CBE license.
    *   Article 225 establishes criminal penalties, including imprisonment and fines from EGP 1 million to EGP 10 million.
*   **Dar al-Ifta Religious Decree (Fatwa No. 4205)**:
    *   Issued: January 1, 2018.
    *   Declared cryptocurrency trading 'Haram' under Islamic law due to risks of fraud, lack of central authority, and potential for illicit use.
*   **CBE Warning Statement on Cryptocurrencies**:
    *   Issued: March 8, 2023.
    *   Reiterated that no licenses have ever been issued and warned that dealing in cryptocurrencies is a criminalized activity.

**IV. Compliance Requirements**
*   The only path to legal operation is obtaining a license from the Central Bank of Egypt under Law No. 194/2020.
*   In practice, *no licenses have ever been issued*, and the CBE maintains a complete freeze on the licensing process.
*   Therefore, there are currently no viable compliance requirements for market entry; the requirement itself functions as a prohibition.

**V. Notable Restrictions or Limitations**
*   **Criminal Penalties**: Unlicensed activities are punishable by imprisonment and fines of no less than EGP 1 million (approx. $20,000 USD) and up to EGP 10 million.
*   **Religious Prohibition**: The fatwa from Dar al-Ifta adds a significant social and religious layer of prohibition alongside the legal ban.
*   **Active Enforcement**: Authorities actively investigate and arrest individuals involved in unauthorized crypto activities, as seen in enforcement cases like 'HoggPool' in 2023.

**VI. Recent Developments or Notes**
*   The CBE's 2023 Warning Statement is a recent reaffirmation of its unwavering position against licensing and the criminal status of crypto activities.
*   The 'Banned' status is unique because the law provides a *theoretical mechanism for legality (licensing)* that is *intentionally unused* by the regulator, creating a 'de facto' ban backed by 'de jure' criminal penalties.

Full Analysis Report

Complete markdown report for this analysis

The regulatory status of cryptocurrency in Egypt is characterized by a strict statutory ban on unlicensed activities, which, in the absence of any issued licenses, functions as a total prohibition. The primary legal instrument is the Central Bank and Banking System Law No. 194 of 2020. Article 206 of this law unequivocally states that 'issuing, trading, promoting, or creating or operating platforms for trading cryptocurrencies or electronic money' is prohibited without obtaining a license from the Central Bank of Egypt (CBE). To date, the CBE has not granted a single license, rendering all crypto-related activities within the country illegal by default.

The penalties for violating this ban are severe. Article 225 of the same law stipulates that violators face imprisonment and/or a fine ranging from 1,000,000 to 10,000,000 Egyptian Pounds. This legal framework replaced earlier, more ambiguous warnings, solidifying the state's zero-tolerance approach. The government's rationale cites high volatility, the use of crypto in financial crimes, and the lack of a central issuer as primary risks to the national financial system.

Beyond the civil law, the religious landscape plays a significant role in Egypt's regulatory environment. Dar al-Ifta, the country's primary Islamic advisory body, issued a Fatwa in 2018 declaring Bitcoin and similar currencies 'Haram' (forbidden). The Grand Mufti cited the lack of central regulation and the potential for fraud as reasons for the prohibition. This religious decree reinforces the state's legal ban and discourages the public from engaging with digital assets.

Enforcement is active and visible. In March 2023, Egyptian authorities arrested 29 individuals involved in the 'HoggPool' crypto scam, which defrauded thousands of investors. The Ministry of Interior frequently conducts raids and arrests individuals for 'trading in cryptocurrencies' or 'mining' without authorization. While the law technically leaves a door open for regulation via licensing, the CBE's consistent refusal to issue licenses and its repeated public warnings confirm that Egypt remains a 'Banned' jurisdiction for retail crypto trading.

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