Custodial wallet / SaaS in Cambodia

"The issuance, circulation, and trading of cryptocurrencies and other virtual currencies in Cambodia are illegal activities."

It warned the public against engaging in such activities, citing risks of fraud, money laundering, and financial instability.

It explicitly stated that "any person or entity that issues, circulates, or trades cryptocurrencies or other virtual currencies without obtaining a license from the National Bank of Cambodia and other relevant authorities, shall be prosecuted in accordance with the applicable laws of the Kingdom of Cambodia."

There are no specific custodial licenses for cryptocurrencies/digital assets in Cambodia because the underlying activities (issuance, circulation, trading) are deemed illegal if not authorized by NBC. Since NBC has not authorized private cryptocurrency activities, no licensing mechanism exists for custody.

Not applicable, as there are no licensed crypto custodians.

There is no legal definition of a "qualified custodian" specifically for cryptocurrencies in Cambodia.

Joint Press Release on the Illegality of Unauthorized Trading Activities of Cryptocurrencies (National Bank of Cambodia, Securities and Exchange Commission of Cambodia, and General Commissariat of National Police, May 11, 2018):

Key Provisions: Defines money laundering and terrorist financing offenses, establishes the legal framework for identifying, verifying, and reporting suspicious activities, and outlines penalties for non-compliance. It also identifies "reporting entities" (or "obliged entities") that must comply. VASPs, by the nature of their services, are generally considered reporting entities under this broad definition, especially concerning the movement of value.

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:

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.

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.

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.

Ensuring that documents, data, or information collected under the CDD process are kept up-to-date.

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.

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.

Direct Obligation: Cambodia is a UN member state and is legally bound to implement sanctions imposed by the UN Security Council Resolutions (UNSCRs). This includes resolutions targeting terrorism financing, proliferation financing (e.g., related to WMDs), and specific individuals, entities, and regimes.

Risk-Based Approach: Assess their money laundering and terrorism financing risks, including sanctions risks.

Customer Due Diligence (CDD) / Know Your Customer (KYC): Verify the identity of customers and beneficial owners. This includes screening against sanctions lists.

Transaction Monitoring: Monitor transactions for suspicious activity, particularly those involving high-risk jurisdictions or sanctioned individuals/entities.

Sanctioned Entity Screening: Regularly screen customers, beneficial owners, and transaction counterparties against national (UN-derived) and international sanctions lists (OFAC, EU).

Reporting Suspicious Transactions (STRs): Report any suspicious transactions to the Cambodian FIU. This would include attempted transactions with sanctioned entities or jurisdictions.

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.

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.