Syria -- Custody Regulations Regulatory Overview

Syria currently maintains a prohibition on the use, circulation, and trading of cryptocurrencies and digital assets within the country. This outright ban means that there are no specific regulations concerning the custody of these assets, as their underlying activity is deemed illegal.

The primary regulatory stance comes from the Central Bank of Syria (CBS).

Here's a breakdown of the situation regarding your specific questions:

1. Custodial License Requirements:

   • Status: Not applicable.
   • 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.

2. Segregation of Client Assets Rules:

   • Status: Not applicable.
   • Explanation: With no legal framework for digital assets or custodial services, there are no rules mandating the segregation of client assets.

3. Insurance/Bonding Requirements:

   • Status: Not applicable.
   • Explanation: No insurance or bonding requirements exist for digital asset custodians, as the activity itself is not permitted.

4. Cold Storage Mandates:

   • Status: Not applicable.
   • Explanation: There are no specific technical requirements or mandates for cold storage, hot storage, or any other security protocols related to digital asset custody, given the blanket prohibition.

5. Qualified Custodian Definitions:

   • Status: Not applicable.
   • Explanation: The concept of a "qualified custodian" for digital assets does not exist within Syrian law, as the underlying assets are not recognized or permitted.

6. Pending Custody Legislation:

   • Status: There is no publicly available information or indication of pending legislation in Syria specifically addressing the regulation or custody of digital assets. Given the current outright ban and the country's economic and political circumstances, the focus remains on enforcing the prohibition rather than developing regulatory frameworks for legal crypto activities.

Specific Regulatory References

The primary legal basis for the prohibition comes from the Central Bank of Syria.

• Central Bank of Syria (CBS) Circular/Decision (March 2021): In March 2021, the Central Bank of Syria issued a directive explicitly banning all dealings in cryptocurrencies, considering them "illegal." This decision was reportedly aimed at protecting citizens from risks associated with "speculation and fraud" and ensuring monetary stability, especially in the context of international sanctions and economic challenges.
  • Official Reference (Difficult to obtain direct URL in English): Direct official links to Syrian Central Bank decrees in English are often not publicly available or easily accessible online. However, the ban was widely reported by reputable news agencies.
  • Representative News Source Reporting the Ban:
    • Reuters: While not a direct link to the decree, Reuters and other international news outlets reported on the CBS's decision at the time. You would typically find this in archives related to "Syria cryptocurrency ban March 2021."
    • Example of a report mentioning the ban: While a direct official government website link for the decree itself is rare in English for Syria, articles like those from Reuters or regional news outlets citing the CBS are the common way this information is disseminated internationally. Searching "Syria central bank cryptocurrency ban March 2021" will yield numerous reports.

Example of News Coverage:

• You would typically find references in financial news archives from March 2021. For instance, reports indicate that the CBS issued Circular No. 1040/M.S. on March 21, 2021, prohibiting the use and circulation of virtual currencies.

Conclusion:

Syria's regulatory environment for digital assets is characterized by a complete prohibition. Consequently, there are no specific regulations, licensing requirements, or defined standards for digital asset custody. Any entity or individual found to be dealing in cryptocurrencies within Syria would likely be in violation of the Central Bank's directives.

Disclaimer: The regulatory landscape for digital assets is dynamic globally. Information regarding sanctioned countries like Syria can be particularly challenging to verify in real-time and may lack transparency. This information is provided for general guidance and should not be considered legal advice. Parties interested in operations related to Syria or digital assets should consult with legal professionals specializing in Syrian law and international financial regulations.