Off the back of a surge in trading volume within Saudi Arabia, Saudi authorities have issued a reminder to their citizens to ensure that they are all aware that cryptocurrency trading an investment is illegal. It seems that prior to this, crypto popularity within Saudi Arabia had recently seen a spike, forcing the governments standing committee to speak out against any involvement with crypto.
The committee in charge is composed of The Capital Market Authority, the Ministry of Interior, the Ministry of Information, the Ministry of Trade and Investment and the Saudi Arabian Monetary Agency.
It is alleged that a number of exchanges have been operating within Saudi Arabia, claiming that they have obtained licenses to trade which in turn is fooling Saudi’s into purchasing cryptocurrency. The committee have responded to such websites, saying:
“The claims of these websites that they are authorized by official authorities in the kingdom are incorrect and that no parties or individuals are licensed for such practices.”
Furthermore, according to Ethereum World News:
“The standing committee also warned Saudi Arabians about the risks involved with investing in digital currencies. The reasons given include volatility of the crypto market, potential scams, anonymity, and the presence of unenforceable or fictitious contracts. The committee also noted that cryptocurrency trading is outside the scope of government supervision and is also notorious for its use in illicit activities.”
“Currently, the committee is working with relevant bodies to reduce such marketing activities. This is not just for digital currency trading, as it also includes forex trading on sites not regulated by SAMA. For clarity purposes, investors should refer to the relevant government entity website for details of licensed entities.”
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We must clarify that whilst cryptocurrencies are illegal in Saudi Arabia, authorities there are still paying close attention to blockchain technologies and indeed, Saudi Arabia are fostering a positive approach towards the blockchain, with many banks and financial service providers working alongside well known cryptocurrency brands.
The future for crypto in Saudi Arabia is uncertain, we do expect that eventually trading will be made legal, once appropriate regulations fall into place. For now though, remember that trading is illegal. We expect the authorities to take action on this and that this warning is simply not just scaremongering, it’s something they are serious about.