Algeria -- Securities Classification Regulatory Overview

Algeria's approach to cryptocurrency tokens is unique: it has adopted a prohibitory stance rather than a regulatory one that distinguishes between different types of tokens (like securities vs. utilities). As such, Algeria does not classify cryptocurrency tokens as securities because the use, possession, and trading of all virtual currencies are prohibited by law.

This means there is no specific "legal test" akin to the Howey test for determining if a token is a security within Algeria, nor are there registration or exemption requirements for token issuers or secondary trading rules, as these activities are illegal.

Here's a breakdown based on the current legal framework:

1. The Legal Test Used (e.g., Howey test equivalent)

• No Specific Test: Algeria does not have a specific legal test for classifying cryptocurrency tokens as securities, or as anything else, because the very concept of "virtual currency" is banned. Therefore, there's no equivalent to the Howey test or any other specific framework for assessing the characteristics of a crypto asset.
• Hypothetical Application of General Securities Law (if crypto were legal): If virtual currencies were to be legalized and regulated in the future, the Algerian financial regulator responsible for capital markets, the Commission d'Organisation et de Surveillance des Opérations de Bourse (COSOB), would likely apply the existing definitions of "securities" and "financial instruments" as outlined in Ordinance No. 03-04 on Capital Markets (Ordonnance n° 03-04 relative aux marchés financiers) and its implementing texts. These typically define securities broadly to include shares, bonds, and other transferable financial instruments that represent an investment or debt, with an expectation of return. However, this is purely hypothetical.

2. Which Tokens are Considered Securities

• None Legally: Currently, no cryptocurrency tokens are legally considered securities in Algeria because all "virtual currencies" are prohibited. The law makes no distinction between different types of tokens (e.g., utility tokens, security tokens, stablecoins, NFTs) for regulatory purposes; they all fall under the general prohibition.
• Implication of the Ban: Any token, regardless of its characteristics, is subject to the ban if it functions as a "virtual currency" or is used in transactions related to them.

3. Registration/Exemption Requirements for Token Issuers

• None (Issuance Prohibited): There are no registration or exemption requirements for token issuers in Algeria because the issuance of any "virtual currency" is illegal. Any entity attempting to issue tokens would be in violation of the law.

4. Secondary Trading Rules

• None (Trading Prohibited): There are no secondary trading rules for cryptocurrency tokens in Algeria because the trading of "virtual currencies" is strictly prohibited. Engaging in such activities carries legal penalties.

5. Enforcement Examples

Enforcement in Algeria focuses on penalizing individuals and entities involved in the prohibited activities related to virtual currencies. Examples typically involve arrests and prosecutions for mining, holding, or trading cryptocurrencies.

• Common Scenarios: Individuals arrested for operating cryptocurrency mining farms or for engaging in online trading of cryptocurrencies. These cases often involve charges related to illegal financial activities or violations of foreign exchange regulations.
• Penalties: Penalties can include fines and imprisonment, as specified in the relevant financial laws.
• Lack of Public Specificity on "Securities": Since the ban is comprehensive, enforcement actions rarely distinguish whether a particular token might have also met a "securities" definition, as the primary charge is simply related to the prohibited virtual currency activity.

6. Specific Legislation and Regulatory Guidance URLs

The cornerstone of Algeria's stance on cryptocurrencies is:

• Law No. 18-13 of December 28, 2018, bearing the Finance Law for 2019 (Loi n° 18-13 du 28 Décembre 2018 portant loi de finances pour 2019).
  • Article 117 of this law explicitly criminalizes the use and trading of virtual currencies.
  • Text (French): Journal Officiel de la République Algérienne Démocratique et Populaire, n° 77 du 30 décembre 2018 (See page 17, Article 117).
  • Summary of Article 117: "L'acquisition, l'aliénation, l'utilisation et la détention de la monnaie virtuelle sont interdites." (The acquisition, alienation, use, and holding of virtual currency are prohibited). It further specifies penalties including imprisonment and fines.

For general securities regulation (which would apply if crypto were legal):

• Ordinance No. 03-04 of July 19, 2003, on Capital Markets (Ordonnance n° 03-04 du 19 juillet 2003 relative aux marchés financiers).

  • Text (French): Journal Officiel de la République Algérienne Démocratique et Populaire, n° 44 du 20 juillet 2003
  • This ordinance defines what constitutes "securities" and "financial instruments" in the traditional sense and establishes the COSOB.

• COSOB (Commission d'Organisation et de Surveillance des Opérations de Bourse):

  • Website: COSOB Official Website (Primarily in French). This is the body that regulates the traditional capital markets in Algeria.

In summary, Algeria bypasses the need to classify crypto tokens as securities by outright prohibiting all virtual currencies. This makes any discussion of "legal tests" or "registration requirements" for crypto assets within Algeria currently moot.