Crypto-funded debit card in Cambodia

Prohibition on Issuance, Trading, and Use: In May 2018, the NBC, in collaboration with the Securities and Exchange Regulator of Cambodia (SERC) and the General-Commissariat of National Police, issued a joint public announcement prohibiting financial institutions and the public from buying, selling, or trading cryptocurrencies.

Legal Reference: Joint Public Announcement on the Management of Digital Currency (May 2018) by the National Bank of Cambodia, Securities and Exchange Commission of Cambodia, and the General-Commissariat of National Police. (Direct English URL often difficult to find; commonly cited as "Joint Announcement on Digital Currency, 2018").

Reiteration of the existing ban and public warnings.

Entity Targeted: The general public, unauthorized individuals/entities attempting to circulate, trade, or develop cryptocurrencies. Violation Type: Circulating, trading, mining, or using unauthorized virtual currencies, which are not recognized as legal tender or financial products in Cambodia. Penalty Amount: Not applicable for public warnings. Criminal penalties would apply for engaging in illegal financial activities or fraud.

Example of recent reinforcement (2022): The NBC Governor reinforced the ban and warned against the risks of digital assets in various forums.

Example of ongoing concern (2023-2024): Cambodian authorities continue to monitor and warn against the use of unauthorized digital assets, often linking it to broader financial stability and anti-money laundering efforts.

General Context & AML Focus (2023):

Outcome: Continued public awareness campaigns and maintenance of the ban, aiming to prevent the adoption and use of cryptocurrencies in the country.

Law on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT Law):

Prakas on the Implementation of the Law on Anti-Money Laundering and Combating the Financing of Terrorism (Prakas 285 on AML/CFT)

Identification and Verification of Customers:

For Individuals: Obtaining and verifying proof of identity (e.g., national ID card, passport, driver's license), date of birth, address, and nationality.

Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of the customer, especially for legal entities. This typically means identifying individuals who ultimately own or control more than a specified percentage (e.g., 25%) of the entity, or who exercise control through other means.

Conducting ongoing due diligence on the business relationship and scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Implementing a risk-based approach to CDD, which means:

Simplified Due Diligence (SDD): Permitted in low-risk situations, with sufficient measures to mitigate any potential risks.

Enhanced Due Diligence (EDD): Required for high-risk customers, business relationships, or transactions (e.g., Politically Exposed Persons - PEPs, customers from high-risk jurisdictions, complex or unusually large transactions, new technologies with inherent anonymity).

Screening customers against relevant national and international sanctions lists (e.g., UN Security Council sanctions) and PEP lists.

Obligation to Report: Any VASP that suspects or has reasonable grounds to suspect that funds or other assets, regardless of the amount, are derived from criminal activity, or are related to terrorist financing, must report promptly.

Recipient: The Cambodia Financial Intelligence Unit (CAFIU).

Timeline: Reports must be made without delay, typically within 24-48 hours of forming the suspicion.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or to third parties that an STR has been or will be submitted.

Record-Keeping: Maintain records of all transactions and CDD information for a specified period.

Training: Provide regular training to staff on AML/CFT obligations, including sanctions compliance.

Termination of correspondent banking relationships.

Inability to process international transactions.

The National Bank of Cambodia (NBC), in conjunction with the Securities and Exchange Commission of Cambodia (SECC) and the National Police, has repeatedly issued warnings against the use and trading of cryptocurrencies, stating that they are unauthorized and illegal in Cambodia for payment and investment purposes. These warnings emphasize risks such as fraud, money laundering, and financial instability. This regulatory stance underpins the lack of specific tax recognition.

None currently exists. Cambodia does not have specific laws or regulations defining cryptocurrency as a taxable asset class (e.g., property, currency, security) or outlining specific tax treatments for various crypto-related activities (e.g., mining, staking, trading, airdrops).

No Crypto-Specific Reporting: Since there are no specific crypto tax laws, there are no specific reporting forms or requirements dedicated solely to cryptocurrency holdings or transactions.

Given that the NBC does not recognize cryptocurrency as a legal tender or a recognized financial instrument, it is highly unlikely that the transaction of cryptocurrency itself would be subject to VAT.