Retail cryptocurrency trading in Saudi Arabia exists in a regulatory gray zone. While a 2018 Standing Committee statement declared virtual currencies 'illegal' and 'unauthorized,' this prohibition primarily targets financial institutions and marketing activities rather than criminalizing individual possession or trading. No domestic licensing regime exists for retail exchanges, and local banks are generally restricted from processing crypto-related transactions, forcing residents to use offshore or regionally licensed platforms (e.g., in Bahrain or UAE).

I. Regulatory Status

• Gray-Zone: Retail cryptocurrency trading exists in a regulatory gray zone.
• Official Prohibition: A 2018 statement declared virtual currencies 'illegal' and 'unauthorized,' but this primarily targets financial institutions and marketing, not individual possession.
• Enforcement Focus: The prohibition functions as a barrier to entry for businesses and a banking system blockade, rather than leading to penal code violations for individual users.
• Domestic Licensing: No domestic licensing regime exists for retail cryptocurrency exchanges.
• User Environment: Creates a 'tolerated but unauthorized' environment where users access offshore platforms.

II. Key Regulatory Bodies

• Saudi Central Bank (SAMA):
  • Primary regulator for banking and payments.
  • Enforces the ban on banks processing cryptocurrency transactions.
  • Operates the SAMA Regulatory Sandbox Framework for fintech experimentation.
• Capital Market Authority (CMA):
  • Regulates securities.
  • Oversees the 'Fintech Lab' sandbox which explores blockchain use cases.
  • Has not licensed any retail cryptocurrency exchanges.
• Standing Committee for Awareness on Dealing in Unauthorized Securities:
  • An inter-agency body including SAMA, CMA, and the Ministry of Interior.
  • Issued the primary 2018 warning declaring cryptocurrency 'illegal.'

III. Important Legislation

• Standing Committee Statement on Unauthorized Securities (Standing Committee Warning) - Enacted: 2018-08-12
  • Declared virtual currencies (specifically Bitcoin) 'illegal in the kingdom' and stated no parties are licensed to issue them.
  • Warned of negative consequences and high risks but did not explicitly outline criminal penalties for individual possession.
• SAMA Regulatory Sandbox Framework (Sandbox Framework) - Enacted: 2019-01-01
  • Establishes a controlled environment for fintech companies to test innovative products.
  • Some blockchain companies have participated, but it has not yet resulted in a full license for retail crypto trading platforms.

IV. Compliance Requirements

• No specific compliance requirements for retail users or domestic exchanges exist, as there is no licensing framework.
• Businesses seeking to operate are effectively blocked by the 2018 prohibition and banking restrictions.

V. Notable Restrictions or Limitations

• Banking Blockade: Saudi banks are generally prohibited from transferring funds to cryptocurrency exchanges.
• Access Methods: This forces users to rely on peer-to-peer (P2P) methods or fund accounts on foreign platforms using international bank accounts or cards.
• Regional Arbitrage: Saudi residents heavily rely on exchanges licensed in neighboring jurisdictions, particularly Bahrain (e.g., Rain, CoinMENA) or the United Arab Emirates (e.g., BitOasis).
• Marketing Restrictions: The 2018 warning likely restricts the marketing and promotion of cryptocurrency services within the kingdom.

VI. Recent Developments or Notes

• Future Regulation: Persistent rumors and initiatives under the 'Vision 2030' economic plan suggest a potential future regulatory framework, but as of late 2025, no retail cryptocurrency law has been enacted.
• Sandbox Activity: Ongoing sandbox operations by SAMA and CMA indicate continued institutional exploration of blockchain technology, though not yet for retail crypto trading.
• Legal Ambiguity: The 'illegal' status is nuanced; it does not equate to an absolute ban like formerly seen in China, as there are no known prosecutions of individuals solely for holding crypto.