On-shore VASP in Cambodia
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP is not permitted in Cambodia.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- Customer Due Diligence (CDD) under Prakas 285 on AML/CFT — must verify identity using reliable source documents for individuals (national ID, passport) and legal entities (incorporation certificate, business license, beneficial owners).
- Enhanced Due Diligence (EDD) required for high-risk customers, PEPs, customers from high-risk jurisdictions, and complex or unusually large transactions.
- Suspicious Transaction Reporting (STR) to the Cambodia Financial Intelligence Unit (CAFIU) — must be made promptly, typically within 24-48 hours of forming suspicion.
- No-tipping-off prohibition — VASPs and employees must not disclose to customers that an STR has been or will be submitted.
- Ongoing monitoring — transactions must be scrutinized throughout the relationship to ensure consistency with customer knowledge and risk profile.
- Screening against UN Consolidated List and PEP lists as part of CDD obligations.
- Record-keeping of all transactions and CDD information for a specified period (as per AML/CFT Law).
- Staff training on AML/CFT obligations including sanctions compliance.
Key Restrictions
- The issuance, circulation, and trading of cryptocurrencies and other virtual currencies are explicitly prohibited by a joint public announcement (May 2018) from NBC, SERC, and the General-Commissariat of National Police unless authorized by NBC.
- No specific VASP licensing framework exists — the underlying activities (issuance, circulation, trading) are deemed illegal if not authorized by the NBC, and the NBC has not authorized private cryptocurrency activities.
- No specific custodial license or regulatory framework for crypto custody exists.
- No Travel Rule implementation for VASPs — no VASP classification or licensing regime exists to make Travel Rule applicable.
Key Risks
- Criminal prosecution risk — the 2018 joint announcement warns that any person or entity issuing, circulating, or trading cryptocurrencies without NBC authorization shall be prosecuted under applicable laws.
- FATF grey-list / AML enforcement exposure — Cambodia has been on FATF's grey list and virtual asset activities are monitored as part of continued AML/CFT enforcement.
- Uncertainty regarding classification of crypto income for tax purposes — no specific crypto tax laws exist; ambiguous whether gains are taxable as business income (20% profit tax) or fall into a gap.
- Correspondent banking de-risking risk — Cambodian entities interacting with the global financial system face pressure from international banks on OFAC/EU sanctions compliance.
- No legitimate pathway to operate as a licensed on-shore VASP — the regulatory environment currently prohibits private crypto activities in practice, with no licensing mechanism to authorize them.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
"The issuance, circulation, and trading of cryptocurrencies and other virtual currencies in Cambodia are illegal activities."
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.
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").
Not explicitly adopted for VASPs: Cambodia has not yet enacted specific legislation or regulations that define VASPs according to FATF standards, license them, and mandate the Travel Rule requirements directly for them.
The existing AML/CFT framework (primarily the Law on Anti-Money Laundering and Combating the Financing of Terrorism) applies generally to financial institutions and designated non-financial businesses and professions (DNFBPs). However, without a clear classification and licensing of VASPs, the Travel Rule cannot be practically enforced against them.
Reiteration of the existing ban and public warnings.
Regulator Name: National Bank of Cambodia (NBC), Securities and Exchange Regulator of Cambodia (SERC), General-Commissariat of National Police (jointly issued original ban).
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.
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:
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.
Screening customers against relevant national and international sanctions lists (e.g., UN Security Council sanctions) and PEP lists.
Implementing a risk-based approach to CDD, which means:
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).
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).
If a Cambodian entity (company, sole proprietorship) engages in activities like cryptocurrency mining, regular trading, or providing crypto-related services (e.g., exchange services, wallets), the income generated from these activities would likely be considered business income.
Standard Tax on Profit Rate: Generally 20% for most legal entities. Progressive rates apply to certain individual businesses (sole proprietorships).
Original 2018/2019 Ban (Context):
Example of recent reinforcement (2022): The NBC Governor reinforced the ban and warned against the risks of digital assets in various forums.
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.
No — a locally-incorporated on-shore VASP is not feasible in Cambodia because the issuance, circulation, and trading of cryptocurrencies are illegal unless authorized by the National Bank of Cambodia, and the NBC has not authorized any private cryptocurrency activities nor established a licensing framework for VASPs.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?