South Sudan

**No Specific Test:** South Sudan has not adopted a specific legal test (like the Howey Test, SAFT framework, or MiCA classifications) to distinguish between security tokens and other types of tokens (e.g., utility tokens, payment tokens).

Units in collective investment schemes

Any other instrument creating or acknowledging indebtedness or representing a beneficial interest in assets.

An *investment contract* or *common enterprise* aiming for profit would likely fall under these broad definitions if the attributes of a crypto token strongly resemble traditional securities. However, this would be an interpretation, not a specific crypto-focused test.

**No Explicit Classification:** No official list or set of criteria has been published by the CBSS or the government of South Sudan to classify specific types of tokens as securities.

**Implied Risk of Classification:** Any crypto token that grants ownership rights, rights to future profits, debt instruments, or represents an investment in an enterprise with an expectation of profit from the efforts of others (i.e., strong characteristics of an "investment contract" or traditional security) would likely be treated as a security *if* the authorities chose to act against it under existing general financial laws. This would be decided on a case-by-case basis through enforcement, rather than proactive classification.

**Focus on Underlying Activity:** The CBSS's concern generally lies with the *activity* being performed using cryptocurrencies rather than the inherent nature of the token itself. If the activity involves unauthorized fundraising, speculation by the general public, or money laundering, it will draw regulatory attention.

**No Specific Regime:** There are no specific registration or exemption requirements tailored for cryptocurrency token issuers.

**General Financial Licensing:** Any entity that seeks to issue financial products, raise capital from the public, or engage in activities that could be construed as banking, investment banking, or offering financial services, would fall under the existing licensing requirements of the Central Bank of South Sudan (CBSS) or other relevant financial regulators.

**Practical Reality:** Given the CBSS's current stance (see Enforcement Examples below), issuing tokens that could be deemed securities without explicit regulatory approval would likely be seen as an unauthorized financial activity, potentially leading to immediate prohibition rather than a licensing process.

**No Specific Rules:** There are no specific rules governing the secondary trading of cryptocurrency tokens, whether security tokens or otherwise.

**Implied Prohibition:** As there are no licensed exchanges or platforms for trading cryptocurrencies in South Sudan, any secondary trading would occur either peer-to-peer or on foreign exchanges. This lack of a regulated local framework means that any local platform facilitating secondary trading of tokens (especially if deemed securities) would likely be considered an unauthorized financial institution or an illegal exchange operation.

**Central Bank Warnings/Prohibitions (Primary Enforcement):** The Central Bank of South Sudan (CBSS) has repeatedly issued warnings and effectively prohibited the use and trading of cryptocurrencies within the country.

**2021/2022 Circulars/Statements:** The CBSS has advised the public against dealing in cryptocurrencies, citing risks such as lack of regulation, volatility, potential for illicit finance (money laundering, terrorism financing), consumer protection issues, and potential disruption to financial stability. These statements generally declare that cryptocurrencies are not legal tender in South Sudan and that activities related to them are not authorized or regulated.

**No Specific "Security Token" Enforcement:** There are no publicly reported cases of the CBSS or other authorities taking action against an entity specifically for issuing or trading a "security token" in South Sudan. Actions would more likely be framed under general prohibitions against unauthorized financial activity or fraud.

**The Central Bank of South Sudan Act, 2011:** This Act establishes the powers and responsibilities of the CBSS, including its mandate to regulate the financial sector, issue currency, and maintain financial stability. This is the primary legal basis for any CBSS pronouncements on financial activities.

*URL:* While a direct official government portal for legislation can be difficult to access and maintain for South Sudan, legal resource sites or central bank websites typically host this. For instance, the **Central Bank of South Sudan website** is the primary source for official statements:

Central Bank of South Sudan Official Website (Note: Websites for developing nations can sometimes be intermittently unavailable or have limited content. Look for "Press Releases" or "Circulars" sections for relevant warnings.)

**Financial Institutions Act (if applicable):** While South Sudan has a developing legal framework, broader financial sector laws would define "financial institutions," "financial products," and licensing requirements. These would be the instruments through which the CBSS *could* interpret certain crypto activities. Specific acts are not readily available online through stable government portals, but they exist within the legal framework.

**Anti-Money Laundering and Combating the Financing of Terrorism Act, 2012** (often referred to as the AML/CFT Act, 2012).

**For individuals:** Obtaining and verifying identity using reliable, independent source documents, data, or information (e.g., full name, address, date of birth, nationality, unique identification number from a national ID card, passport, or driving license).

**For legal entities/arrangements:** Obtaining and verifying the name, legal form, proof of existence, powers that regulate and bind the entity, and the names of relevant persons holding senior management positions.

**Beneficial Ownership:** Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of customers, including understanding the ownership and control structure of legal persons and arrangements.

**Purpose and Nature of Business Relationship:** Understanding the purpose and intended nature of the business relationship.

**Ongoing Monitoring:** Conducting ongoing due diligence on the business relationship and scrutiny of 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.

**Enhanced Due Diligence (EDD):** Applying EDD measures for higher-risk categories, such as politically exposed persons (PEPs), cross-border correspondent relationships, or transactions with complex or opaque structures, or those involving high-risk jurisdictions.

**Obligation:** If a VASP knows, suspects, or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, they must promptly report their suspicions to the Financial Intelligence Unit.

**Content:** Reports must include all available information concerning the customer, the transaction(s), and the grounds for suspicion.

**No Tipping-Off:** VASPs and their employees are prohibited from disclosing to the customer or any third party that a suspicious transaction report has been or will be submitted, or that an AML/CFT investigation is being conducted.

**Duration:** Records must typically be maintained for a period of **at least five (5) years** after the business relationship is ended, or after the date of the occasional transaction.

Records of all transactions, domestic and international.

Records of CDD information (identification data, account files, business correspondence).

Records of suspicious transaction reports filed.

Records of risk assessments and their updates.

**Financial Intelligence Unit of South Sudan (FIUSS):**

**Role:** The central national agency responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial information concerning money laundering and terrorist financing.

**URL:** Information on the FIUSS is typically found on the Bank of South Sudan's website or through regional bodies like ESAAMLG. A direct, standalone, regularly updated website for FIUSS may not be readily available. However, it operates under the broader framework overseen by the central bank.

**Role:** The central bank acts as the primary regulator for financial institutions in South Sudan. While it has not issued specific VASP regulations, it would be the de facto authority to extend existing AML/CFT compliance expectations to any entities falling under its general oversight or seeking to operate within the regulated financial system. The BSS would also be instrumental in developing any future specific VASP regulations.

**Legal Uncertainty:** The lack of specific VASP legislation creates significant legal uncertainty. While a VASP is expected to comply with general AML/CFT laws, the exact scope of "financial institution" or "DNFBP" and direct supervisory authority can be ambiguous.

**Consultation is Key:** Any VASP considering operating in South Sudan should engage with local legal counsel and potentially the Bank of South Sudan directly to understand the current regulatory stance, potential interpretations of existing laws, and any upcoming policy developments.

**Evolving Landscape:** The global regulatory environment for virtual assets is rapidly evolving. South Sudan, as an ESAAMLG member, is under increasing pressure to align its framework with FATF Recommendation 15 on virtual assets and VASPs. This means future specific regulations are highly likely.

**Risk-Based Approach:** Even without explicit VASP rules, adopting a strong risk-based approach to AML/CFT is crucial. This involves assessing the risks associated with the specific services offered, customer base, geographic areas, and transaction types.

**Regulator Name:** Bank of South Sudan (BSS)

**Action Type:** Public Warnings and Prohibitions on Financial Institutions

**Entity Targeted:** Not specific entities or individuals, but rather the general public and licensed financial institutions.

**Violation Type:** While not a "violation" in the sense of a specific crime with a penalty, the BSS has warned against the risks of unregulated cryptocurrencies, stating they are not legal tender and are subject to extreme volatility and potential for illicit activities. Financial institutions are effectively prohibited from engaging with crypto.

**Penalty Amount:** No specific monetary penalties have been publicly disclosed for direct crypto-related violations against entities. The "penalty" for financial institutions would be regulatory action by the BSS if they were found to be facilitating crypto transactions against central bank guidance.

**Date:** These warnings have been reiterated over several years, with significant statements in late 2021 and 2022.

**Outcome:** The outcome is a strong discouragement of cryptocurrency use within the official financial system and for the public, clarifying that crypto assets hold no legal status in South Sudan.

**Bank of South Sudan's Statement (Reported by various news outlets):**

**Entity Targeted:** General public and financial institutions.

**Violation Type:** Engaging with or facilitating the use of unregulated, high-risk assets that are not legal tender. (Implicit: regulatory non-compliance for financial institutions).

**Penalty Amount:** No specific penalty amount against any entity.

**Date:** Statements and warnings have been made at various times, notably in **late 2021 to 2022**, and remain the official position.

**Outcome:** Cryptocurrencies are not recognized as legal tender, and the public is warned against using them. Financial institutions are expected to avoid dealing with crypto.

**Capital Business (Oct 2022):** https://www.capitalfm.co.ke/business/2022/10/south-sudan-warns-its-citizens-against-use-of-cryptocurrency/ (Another report on the BSS warning.)