On-shore VASP in Syria

None are available or required. Engaging in these activities with cryptocurrencies is generally prohibited under current Syrian financial regulations.

Any entity attempting to operate such services would be doing so outside the legal framework and would face severe legal repercussions.

Neither a registration nor a licensing regime exists for virtual assets. The regime is one of prohibition.

Central Bank of Syria Circular No. 6/M.A. (2021):

Specific Prohibition: It prohibits individuals and entities from creating, promoting, trading, or using any form of virtual currencies within Syria.

Consequences: The circular warns of legal prosecution for those found violating these directives.

Legal prosecution: Imprisonment and fines.

Blocking of funds and accounts.

Irrelevant. Since the activities are prohibited, there are no prescribed requirements for capital, AML/KYC policies (specific to crypto, general financial AML/KYC still applies to traditional finance), or local presence for crypto businesses.

There is no application process for cryptocurrency licenses or registrations, as these are not issued.

Prohibition: The Central Bank of Syria (CBS) has repeatedly issued warnings and directives prohibiting the use and trading of cryptocurrencies.

Criminalization: Law No. 36 of 2022 (issued in November 2022) explicitly criminalizes various activities related to cryptocurrencies, including their use as a payment method, trading, and promotion. Penalties are severe, including imprisonment and hefty fines.

There are no legal AML/KYC requirements because the service itself is prohibited.

Engaging in such activities carries significant criminal penalties under Law No. 36 of 2022.

Furthermore, Syria is subject to international sanctions, making any financial activity, especially involving novel assets like crypto, extremely high-risk from an international compliance perspective.

Explanation: Since cryptocurrencies are prohibited, there are no licensing frameworks for any entities (including financial institutions) to provide custodial services for digital assets. Engaging in such activities would likely be considered a violation of the existing ban.

No specific framework: Given the outright ban on cryptocurrency, there is no specific capital gains tax framework for virtual assets in Syria.

Illegal activity: Any profits made from crypto trading would arise from an illegal activity and would not be subject to a legal tax regime. Instead, individuals caught dealing in crypto could face criminal charges and confiscation of assets.

Regulator Name: Central Bank of Syria (CBS)

Entity Targeted: All individuals and institutions within Syria engaging in or promoting cryptocurrency activities. This is a blanket prohibition rather than targeting a single entity. Violation Type: Engaging in, trading, promoting, or possessing virtual currencies, deemed illegal and subject to severe penalties under Syrian law. The CBS views these activities as speculative, highly risky, and a threat to the national currency and financial stability. Penalty Amount: No specific monetary penalty was announced for the policy itself. However, violations of this ban would likely incur severe penalties under existing Syrian laws related to financial crimes, illegal currency trading, or activities undermining the state's economic stability. These could include fines, asset forfeiture, and imprisonment, though specific case outcomes are not publicly disclosed.

Outcome: All cryptocurrency activities (trading, mining, possession, promotion) are officially illegal within Syria. This directive empowers authorities to crack down on anyone found dealing with digital assets. Reports from within Syria, though anecdotal and difficult to verify with official sources, suggest individuals have faced arrest and asset seizure for cryptocurrency-related activities following this ban.

Al-Monitor: "Syria’s central bank bans cryptocurrency trading" (February 2, 2023)

Reuters: "Syria's central bank bans cryptocurrency trading" (January 31, 2023)