Myanmar -- Securities Classification Regulatory Overview

Myanmar's regulatory landscape for cryptocurrencies is primarily characterized by prohibition rather than a developed framework for classifying tokens as securities. The Central Bank of Myanmar (CBM), under the State Administration Council (SAC), has issued directives against the use, trading, and mining of cryptocurrencies.

This means that, in practice, there is no specific legal test (like the Howey Test) for classifying cryptocurrency tokens as securities by the official government, nor are there recognized categories of tokens considered securities. Instead, all cryptocurrencies are generally viewed as illegal and unauthorized payment instruments.

Here's a breakdown based on the current situation:

1. Legal Test Used (Howey Test Equivalent)

• No specific test exists for crypto: The official government in Myanmar has not adopted a specific legal test equivalent to the Howey Test or any other framework for classifying cryptocurrency tokens as securities. This is primarily because its stance is one of outright prohibition, rendering such classification frameworks largely irrelevant under the current official policy.
• General Securities Exchange Law: Myanmar has a Securities Exchange Law (2014) which defines what constitutes a "security." However, this law predates the widespread emergence of cryptocurrencies and has not been updated or interpreted by the Securities Exchange Commission of Myanmar (SECM) to specifically address digital assets. The general definition of a "security" in the law might broadly encompass certain characteristics of investment contracts, but without specific guidance, it does not apply to crypto due to the CBM's blanket ban.

2. Which Tokens are Considered Securities

• None by official government: From the perspective of the official Myanmar government (SAC), no cryptocurrency tokens are officially recognized or considered as securities for regulatory purposes. All cryptocurrencies are generally deemed illegal for use as currency or investment.
• National Unity Government (NUG) stance (unofficial): It's crucial to note the parallel developments. The National Unity Government (NUG), formed by elected lawmakers ousted by the 2021 military coup, has taken a different stance. In December 2021, the NUG declared Tether (USDT) as an official currency for local use. This move, however, is not recognized by the SAC and has been met with further warnings from the CBM, reinforcing its ban on all cryptocurrencies. The NUG's action does not classify USDT as a security but rather as a currency.

3. Registration/Exemption Requirements for Token Issuers

• Non-existent: Given the official prohibition on cryptocurrencies, there are no established registration or exemption requirements for token issuers in Myanmar. Issuing or facilitating the trading of cryptocurrency tokens would likely be viewed as an unauthorized financial activity.

4. Secondary Trading Rules

• Prohibited: Similarly, there are no specific rules for secondary trading of cryptocurrency tokens because all such activities are generally prohibited by the Central Bank of Myanmar. Any platforms or individuals engaging in secondary trading would be operating outside the legal framework and subject to enforcement actions.

5. Enforcement Examples

The primary enforcement actions taken by Myanmar authorities relate to the prohibition of cryptocurrencies in general, rather than their classification as securities.

• Central Bank of Myanmar Warnings (2020/2021 onwards):
  • The CBM issued a strong warning in May 2020 (reiterated multiple times since, especially after the 2021 coup) stating that cryptocurrencies are not legal tender in Myanmar and that engaging in their use, trading, or mining is illegal. It warned the public about the risks involved, including financial loss, fraud, and money laundering.
  • Following the NUG's declaration of USDT as an official currency in late 2021, the CBM under the SAC further intensified its warnings, explicitly stating that it would take legal action against anyone trading or using digital assets like USDT.
• Potential for Legal Action: Individuals or entities found to be dealing in cryptocurrencies could face charges under existing financial laws relating to unauthorized financial services, foreign exchange regulations, or potentially even broader laws depending on the specific activities involved (e.g., money laundering if large sums are involved). While specific public enforcement cases leading to conviction often receive less international media attention from Myanmar, the regulatory pronouncements themselves serve as a significant deterrent and official stance.

Specific Legislation and Regulatory Guidance URLs

It's challenging to provide direct, stable URLs to specific directives from Myanmar's regulatory bodies, especially post-coup, as government websites can be inconsistent or directives might be primarily communicated through local state media. However, the relevant overarching bodies and their general domains are:

• Central Bank of Myanmar (CBM): The primary authority issuing warnings and prohibitions.

  • URL: https://www.cbm.gov.mm/
  • Note: Specific press releases or directives regarding crypto might be found within their news/announcements sections if available and up-to-date.

• Securities Exchange Commission of Myanmar (SECM): Responsible for traditional securities.

  • URL: https://www.sec.gov.mm/
  • Note: This site is less likely to contain crypto-specific guidance due to the CBM's overarching ban.

• Securities Exchange Law (2014): This is the foundational law for securities in Myanmar. While it doesn't mention digital assets, it's the framework that would theoretically be used if crypto were ever to be regulated as securities.

  • Note: Finding a direct, stable English-language PDF of Myanmar laws online can be difficult. It's usually available through legal databases or local government gazettes.

In summary: Myanmar's official government stance on cryptocurrencies is one of prohibition. This means that a framework for classifying tokens as securities, including specific legal tests, registration requirements, or trading rules, simply does not exist. Any engagement with cryptocurrencies is considered illegal and subject to enforcement actions primarily led by the Central Bank of Myanmar.