Centralized exchange in Iraq
Order-book exchange that takes custody of user assets and matches trades between users.
CEX is not permitted in Iraq.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No lawful VASP/exchange obligations exist — the CBI has imposed a blanket ban on cryptocurrency trading, use, and advertising.
- Traditional financial institutions (banks, etc.) remain subject to AML/CFT obligations under Law No. 39 of 2015, including CDD, EDD, record-keeping (5–10 years), and STR filing to the AML/CFT Office (FIU).
- Any observed crypto-related transactions by licensed financial institutions would trigger STR obligations as potentially illicit activity.
Key Restrictions
- Outright ban on cryptocurrency use, trading, and advertising imposed by Central Bank of Iraq (CBI) directives (February 2021 and February 2023).
- All licensed banks, financial institutions, and payment service providers are prohibited from dealing in cryptocurrencies.
- Foreign companies operating illicitly within Iraq face legal consequences.
- No licensing pathway exists for a centralized exchange or any VASP.
Key Risks
- Operating a centralized exchange in or targeting Iraq is illegal and carries risk of criminal penalties, asset seizure, and imprisonment.
- The CBI has repeatedly reaffirmed the ban (2021 and 2023), signaling sustained enforcement intent.
- Lack of regulatory clarity or licensing framework creates a total prohibition, not a grey area.
- Reputational and correspondent-banking risk for any entity facilitating crypto flows to/from Iraq.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Decree: In February 2022 (and reiterated earlier), the Central Bank of Iraq (CBI) issued directives prohibiting the use, trading, and advertising of cryptocurrencies within Iraq. The CBI considers cryptocurrencies to be highly volatile, prone to fraud, and lacking proper regulatory oversight, posing risks to the financial system and national security.
Implication: This ban means that there are no legally operating cryptocurrency exchanges or virtual asset service providers in Iraq. Any entity engaging in such activities within Iraq would be doing so illegally.
Law No. 39 of 2015 – Anti-Money Laundering and Combating the Financing of Terrorism Law: This is the primary legislation. It establishes the legal framework for combating money laundering and terrorist financing across all sectors of the Iraqi financial system. It aligns with international standards set by the Financial Action Task Force (FATF).
CBI Regulations: The Central Bank of Iraq issues various regulations and instructions to implement Law No. 39, applicable to banks and financial institutions under its supervision.
Original Ban Directive (2021)
Re-affirmation and Enhanced Warnings (2023)
Outcome: All licensed banks, financial institutions, and payment service providers were prohibited from dealing in cryptocurrencies. This established the legal framework making crypto activities illegal in Iraq.
Outcome: Reinforced the existing ban, explicitly stating that using or dealing with cryptocurrencies is against Iraqi law and that violators would face legal consequences. It aimed to shut down any perceived loopholes or illicit operations. This was a significant re-emphasis of the country's hardline stance.
Blanket Ban: Because crypto is outright banned, enforcement tends to fall under broader financial crime or anti-money laundering laws rather than specific crypto-related administrative fines.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Not permitted — the Central Bank of Iraq has imposed an outright ban on cryptocurrency trading, use, and advertising; no licensing pathway exists for a centralized exchange or any VASP in Iraq.
Questions this verdict aims to answer
- What exchange / VASP license applies?
- What custody segregation rules apply to user assets?
- What market-conduct and listing rules apply?
- What travel-rule obligations apply on withdrawals?