Stablecoin issuer / redeemer 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.

Segregation of Client Assets Rules:

Cold Storage Mandates:

Qualified Custodian Definitions:

Not applicable, as there are no licensed crypto custodians.

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").

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.

For Legal Entities/Corporations: Obtaining and verifying legal name, address, proof of incorporation/registration (e.g., certificate of incorporation, business license), names of directors/senior management, and beneficial owners.

Method: Verification must be performed using reliable, independent source documents, data, or information.

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.

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

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.

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

UN Consolidated List: https://www.un.org/securitycouncil/sanctions/un-sc-consolidated-list

Indirect but Crucial: While OFAC (U.S. Department of the Treasury's Office of Foreign Assets Control) and EU sanctions are not directly legally binding within Cambodian territory in the same way UN sanctions are, they are critically important for any Cambodian entity or individual engaging in international financial transactions, including those involving cryptocurrencies.

Compliance for VASPs (Hypothetical): Any VASP with Cambodian users, or a VASP operating in Cambodia (even if non-compliant with local crypto laws), that interacts with the global financial system (e.g., through fiat on/off-ramps, stablecoins, or cross-border crypto transfers) must comply with OFAC and EU sanctions to avoid severe penalties from those 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.

Evidence fact kh.tax.none-currently-exists-cambodia-does-not not found (may have been renamed).

For Individuals: If an individual sporadically trades crypto and realizes a gain, it is highly ambiguous whether this would be explicitly taxed as capital gain given the current laws. There's no clear mechanism to tax personal capital gains outside of specific asset classes like real estate.

Standard Tax on Profit Rate: Generally 20% for most legal entities. Progressive rates apply to certain individual businesses (sole proprietorships).