Remote VASP serving residents in Iraq

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.

Original Ban Directive (2021)

Re-affirmation and Enhanced Warnings (2023)

Entity Targeted: All financial institutions operating under CBI supervision, and implicitly, the general public and any platforms attempting to facilitate cryptocurrency trading or transactions within Iraq. Penalty Amount: Not a specific fine for the directive itself. Non-compliance by financial institutions could lead to severe regulatory penalties, including fines, license suspension, or revocation. Individuals could face legal prosecution under existing financial crime laws.

Entity Targeted: Financial institutions, payment companies, money transfer agencies, and the general public, with specific warnings against foreign companies operating illicitly within Iraq. Violation Type: Engaging in, promoting, or facilitating cryptocurrency transactions, deemed a breach of Iraqi financial law and a risk to the national economy and financial system. Penalty Amount: Not a specific fine for the re-affirmation. The directive reiterated that any individual or entity found dealing in cryptocurrencies would be subject to legal prosecution, implying criminal charges rather than administrative fines.

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.

Lack of Transparency: Iraqi authorities generally do not publicly disclose details of individual arrests, investigations, or specific financial penalties related to cryptocurrency violations in a systematic or easily accessible manner, especially to international observers.