Self-custodial wallet / non-custodial software in Libya
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is not permitted in Libya.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No specific AML obligations attach because self-custodial software publishing is not recognized as a regulated activity in Libya; however, any use of the software for illicit financial activity would fall under Libya's general AML/CFT Law (Law No. 1 of 2021) and could subject the user — not the publisher — to criminal prosecution.
- The publisher does not fall within the definition of 'financial institution' or 'DNFBP' under Law No. 1 of 2021 because it never holds, controls, or accesses user funds or private keys.
Key Restrictions
- Libya's Central Bank (CBL) Circular No. 2 of 2018 effectively bans dealing in, trading, or possessing virtual currencies, and self-custodial wallet software could be considered facilitating a prohibited activity in the territory.
- No regulatory framework exists for virtual asset service providers (VASPs); the CBL has not licensed or recognized any crypto-related business.
- Publishing or distributing self-custodial wallet software to Libyan residents carries legal risk because any use of the software to transact in cryptocurrencies is treated as an unregulated and prohibited activity under CBL guidance.
Key Risks
- Legal risk: Although the publisher never touches funds, the software enables access to a prohibited asset class (cryptocurrencies). Libyan authorities could view distribution as facilitating illegal financial activity under the CBL's broad ban.
- Enforcement opacity: Limited transparency around enforcement actions and limited English-language documentation make it difficult to assess actual prosecution risk for software publishers.
- No registration/legalization pathway exists — there is no mechanism for a publisher to comply and operate lawfully, creating permanent legal uncertainty.
- Reputational risk: Association with Libya, which is on the FATF grey list (if applicable) or subject to international scrutiny over AML/CFT controls, could affect correspondent banking relationships.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Central Bank of Libya (CBL) Circular No. 2 of 2018:
General Prohibition: All virtual currencies are generally subject to the same prohibitory or highly restrictive guidance issued by the CBL. The CBL does not distinguish based on the underlying nature or rights conferred by the token; rather, it focuses on the medium of exchange itself being unregulated and risky.
Outcome: Cryptocurrencies remain illegal in Libya.
Date: The initial ban was issued in 2018, and it has been reaffirmed multiple times since. There is no indication it has been lifted in the last three years.
Law No. 1 of 2021 on Anti-Money Laundering and Combating the Financing of Terrorism (Amending and replacing earlier laws like Law No. 2 of 2005).
AML/CFT Prosecution: Any use of cryptocurrencies in illicit activities (e.g., money laundering, financing terrorism, fraud) would fall under Libya's existing Anti-Money Laundering and Combating the Financing of Terrorism laws. While these laws are not crypto-specific for securities classification, they provide a legal basis for prosecuting individuals involved in illicit financial activities, regardless of the asset used.
VASPs, if regulated, would be obliged to report any suspicious transactions to the Financial Intelligence Unit (FIU).
None Exist: There are no established registration or exemption requirements for token issuers in Libya. This is primarily because the issuance or facilitation of trading such tokens is not a recognized or permitted activity under current regulations. The CBL's guidance effectively makes it unfeasible or illegal for entities to operate in this space.
Lack of Legal Basis: Without a legal framework that recognizes and regulates crypto assets, there is no mechanism for issuers to seek registration or exemptions.
Regulator Name: Central Bank of Libya (CBL)
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 — self-custodial wallet software publishing is not permitted in Libya because the CBL's 2018 ban effectively prohibits all virtual currency activity, no VASP licensing framework exists, and there is no legal pathway to offer such software to residents.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?