Libya

Retail_Trading_Status

Banned High Confidence

Analysis ID: #710
Version: Latest
Created: 2025-12-12 04:44
Run: 3a192749...
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Workflow Stage: Step 1

Executive Summary

Cryptocurrency trading, holding, and mining are effectively illegal in Libya. The Central Bank of Libya (CBL) issued a circular in 2018 explicitly banning the use of virtual currencies, declaring them illegal and warning that no legal protection is afforded to users. This ban is rigorously enforced by the Attorney General's Office and security forces, primarily targeting mining operations due to the severe strain they place on the national electricity grid, with recent court rulings handing down prison sentences to offenders.

Detailed Explanation

Libya maintains a comprehensive and actively enforced ban on all cryptocurrency activities, rendering trading, holding, and mining effectively illegal. The regulatory framework is anchored by a 2018 circular from the Central Bank of Libya (CBL), which explicitly prohibits financial institutions and individuals from dealing in virtual currencies, declaring such activities illegal and offering no legal protection to users. This foundational ban is rigorously enforced by the Attorney General's Office and security forces, who conduct raids and make arrests. The primary driver for this severe enforcement is the strain cryptocurrency mining places on the national electricity grid, a critical concern for the General Electricity Company of Libya (GECOL) given the country's chronic power crisis. This has led to targeted actions against mining operations, supported by additional regulations like the Ministry of Economy's Decree No. 333 of 2022, which bans the importation of mining equipment. The legal basis for prosecution is further strengthened by the Anti-Cybercrime Law (Law No. 5 of 2022), whose broad provisions are used alongside anti-money laundering statutes to criminalize unauthorized digital asset activities. The enforcement is notably harsh, with recent court rulings in cities like Zliten and Misrata resulting in prison sentences of up to three years for individuals caught mining or trading. A significant number of those arrested are foreign nationals, often operating large-scale mining farms, highlighting the government's focus on curbing industrial-scale operations that exacerbate the energy shortage. The crackdown, while framed by the CBL in terms of financial risks like money laundering and terrorism financing, is fundamentally a response to the acute electricity crisis, making Libya's prohibition one of the most stringent and actively policed in the world.

Summary Points

I. Regulatory Status
* Banned – All cryptocurrency activities, including trading, holding, and mining, are effectively illegal.
* The Central Bank of Libya's 2018 circular explicitly declares virtual currency dealings illegal, with no legal protection afforded to users.
* The ban is actively and severely enforced, with security raids, arrests, and prison sentences for participants.

II. Key Regulatory Bodies
* Central Bank of Libya (CBL): Issued the foundational ban and maintains the financial prohibition.
* Attorney General's Office (Public Prosecution): Leads criminal prosecutions against individuals involved in crypto activities.
* Internal Security Agency: Conducts enforcement actions, including raids on mining operations.
* General Electricity Company of Libya (GECOL): Implicitly a key stakeholder, as the crackdown is heavily motivated by protecting the national grid from mining-related strain.

III. Important Legislation
* CBL Circular on Virtual Currencies (2018): Enacted 2018-01-01. Prohibits all dealings in virtual currencies by financial institutions and individuals, citing money laundering and terrorism financing risks.
* Anti-Cybercrime Law (Law No. 5 of 2022): Enacted 2022-10-01. While defining 'electronic money', it does not authorize crypto; its broad provisions are used to criminalize unauthorized digital asset activities.
* Ministry of Economy Decree (Decree No. 333 of 2022): Enacted 2022-01-01. Bans the importation of cryptocurrency mining equipment to curb electricity consumption.

IV. Compliance Requirements
* Not applicable – As the activity is banned, there is no compliance framework for operating legally.

V. Notable Restrictions or Limitations
* Total Prohibition: No legal avenue exists for buying, selling, holding, or mining cryptocurrencies.
* Equipment Ban: Importation of cryptocurrency mining hardware is specifically prohibited.
* Severe Penalties: Convictions can result in prison sentences, with recent cases showing terms of up to three years.
* Targeted Enforcement: Mining operations are a primary target due to their high energy consumption, which exacerbates national power outages.
* Focus on Foreign Operators: Enforcement actions have notably involved the arrest of foreign nationals (often Chinese) running industrial-scale mining farms.

VI. Recent Developments or Notes
* The intense crackdown, including recent prison sentences from courts in Zliten and Misrata, is largely a response to the country's severe electricity crisis rather than purely financial regulatory ideology.
* The 2018 CBL circular remains the cornerstone of the ban, with subsequent laws and decrees providing additional tools for enforcement and addressing specific issues like equipment import and cybercrime.

Full Analysis Report

The regulatory status of cryptocurrency in Libya is unequivocally Banned, characterized by a complete prohibition on the use, trading, and mining of digital assets. The Central Bank of Libya (CBL) initiated this stance in 2018, issuing a circular that declared virtual currencies illegal due to their anonymity, volatility, and potential use in terrorism financing and money laundering. The CBL emphasized that no legal protection would be available to those who engage in crypto transactions, effectively stripping the sector of any legal standing.

Enforcement has escalated significantly between 2023 and 2025, driven by the involvement of the Attorney General's Office. Unlike jurisdictions where bans are merely administrative (blocking bank transfers), Libya employs criminal prosecution. Security forces, including the Internal Security Agency, frequently conduct raids on suspected mining facilities. These operations are often intelligence-led, targeting high-consumption sites that strain the General Electricity Company of Libya (GECOL) grid. The crackdown is not limited to warnings; it involves the confiscation of hardware and the arrest of operators.

In a notable escalation of legal consequences, courts have begun handing down prison sentences. For instance, in late 2025, a court in Zliten sentenced several individuals to three years in prison for operating a crypto mining farm inside a steel factory. Similar raids in Benghazi and Tripoli have resulted in the seizure of thousands of mining rigs. The legal basis for these prosecutions often combines the CBL's ban with laws against illicit foreign exchange dealings, money laundering, and the theft of public electricity.

Despite the strict ban, Libya remains a global hotspot for Bitcoin mining due to its heavily subsidized electricity costs (among the cheapest in the world). This economic incentive has created a 'cat-and-mouse' dynamic where illegal operators set up concealed farms in industrial zones to mask their heat and energy signatures. The government views this not just as a financial crime but as a threat to national infrastructure, as mining operations reportedly consume a significant percentage of the country's total power output, worsening the daily blackouts suffered by citizens.

The regulatory status of cryptocurrency in Libya is unequivocally **Banned**, characterized by a complete prohibition on the use, trading, and mining of digital assets. The Central Bank of Libya (CBL) initiated this stance in 2018, issuing a circular that declared virtual currencies illegal due to their anonymity, volatility, and potential use in terrorism financing and money laundering. The CBL emphasized that no legal protection would be available to those who engage in crypto transactions, effectively stripping the sector of any legal standing.

Enforcement has escalated significantly between 2023 and 2025, driven by the involvement of the Attorney General's Office. Unlike jurisdictions where bans are merely administrative (blocking bank transfers), Libya employs criminal prosecution. Security forces, including the Internal Security Agency, frequently conduct raids on suspected mining facilities. These operations are often intelligence-led, targeting high-consumption sites that strain the General Electricity Company of Libya (GECOL) grid. The crackdown is not limited to warnings; it involves the confiscation of hardware and the arrest of operators.

In a notable escalation of legal consequences, courts have begun handing down prison sentences. For instance, in late 2025, a court in Zliten sentenced several individuals to three years in prison for operating a crypto mining farm inside a steel factory. Similar raids in Benghazi and Tripoli have resulted in the seizure of thousands of mining rigs. The legal basis for these prosecutions often combines the CBL's ban with laws against illicit foreign exchange dealings, money laundering, and the theft of public electricity.

Despite the strict ban, Libya remains a global hotspot for Bitcoin mining due to its heavily subsidized electricity costs (among the cheapest in the world). This economic incentive has created a 'cat-and-mouse' dynamic where illegal operators set up concealed farms in industrial zones to mask their heat and energy signatures. The government views this not just as a financial crime but as a threat to national infrastructure, as mining operations reportedly consume a significant percentage of the country's total power output, worsening the daily blackouts suffered by citizens.

Source Evidence

Primary and secondary sources cited in this analysis

Central Bank of Libya Warning on Virtual Currencies primary (regulator)

2018-01-01

"The Central Bank of Libya warns against the use of virtual currencies... which are illegal and not subject to the supervision of the Central Bank."

Attorney General's Office Statement on Zliten Mining Raid primary (official_government)

2023-06-23

"The Public Prosecution ordered the imprisonment of the accused... for managing a factory used to mine cryptocurrencies in violation of the rules of monetary policy."

Libya cracks down on illegal bitcoin mining amid sector growth secondary (news)

2025-12-09

"In November 2025, prosecutors charged nine individuals... sentencing them to three years in prison."

Libya Arrests 50 Chinese Nationals in Crypto Crackdown secondary (news)

2023-06-23

"Libyan authorities have arrested 50 Chinese nationals allegedly involved in an illegal cryptocurrency mining operation."