Syria -- Securities Classification Regulatory Overview

It is crucial to preface this by stating that Syria does not have a developed or public legal framework for classifying cryptocurrency tokens as securities.

Instead, Syria's approach to cryptocurrencies is one of outright prohibition. The Syrian government, primarily through its Central Bank of Syria (CBS), has declared all dealings in cryptocurrencies as illegal. This means that the nuanced distinction between "security tokens," "utility tokens," or "payment tokens" (as seen in jurisdictions with sophisticated crypto regulations) simply does not exist in the public Syrian legal landscape. All cryptocurrencies are generally treated as prohibited financial instruments.

Here's a breakdown based on the available information:

Legal Test Used (e.g., Howey Test Equivalent)

• None. Syria does not employ a "Howey Test equivalent" or any specific legal test to classify cryptocurrency tokens as securities. The regulatory stance is a blanket prohibition on all cryptocurrency-related activities.
• The legal basis for this prohibition stems from the Central Bank's mandate to protect the national currency (Syrian Pound), maintain financial stability, and combat illicit financial activities and capital flight, especially given the context of international sanctions.

Which Tokens Are Considered Securities

• Not applicable. No specific cryptocurrency tokens are "considered securities" under a distinct regulatory framework. Instead, all forms of cryptocurrencies (Bitcoin, Ethereum, stablecoins, altcoins, NFTs with financial characteristics, etc.) are generally treated as prohibited or illegal financial instruments.
• The focus is on the activity of dealing with them (buying, selling, mining, holding, transferring) rather than their specific classification as a type of security.

Registration/Exemption Requirements for Token Issuers

• None. Since all cryptocurrency activities are prohibited, there are no legal registration or exemption requirements for token issuers. Issuing new tokens in or from Syria would be an illegal activity.

Secondary Trading Rules

• None. There are no specific rules for secondary trading of tokens because all trading (primary or secondary) is prohibited. Any platform or individual facilitating such trading would be operating illegally.

Enforcement Examples

Enforcement in Syria typically falls under broader financial crime laws, anti-money laundering (AML) legislation, and decrees related to the protection of the national economy. While specific, publicly detailed cases are scarce due to the opacity of the Syrian legal system and the nature of the state, enforcement generally involves:

• Arrests and Prosecution: Individuals involved in trading, mining, or facilitating cryptocurrency transactions have been arrested and prosecuted. Penalties can include fines and imprisonment.
• Blocking Access: Authorities may attempt to block access to cryptocurrency exchanges and related websites from within Syria.
• Confiscation: Assets (including digital assets if they can be seized or traced to identified individuals) involved in illegal transactions may be confiscated.
• Public Warnings: The CBS frequently issues public warnings about the illegality and risks associated with cryptocurrencies.

Example (General): News reports and local accounts often describe raids on internet cafes or homes suspected of crypto mining, and the arrest of individuals involved in online crypto trading groups, especially those facilitating cross-border transactions that could be seen as circumventing capital controls or sanctions.

Specific Legislation and Regulatory Guidance

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

1. Central Bank of Syria - Decision No. 1290/M.A (2021):

   • This decision explicitly banned all dealings in cryptocurrencies, considering them "illegal electronic currencies." It warned against the risks of dealing with them and emphasized that they are not recognized as legal tender.
   • URL: While the CBS website itself can be difficult to navigate for direct links to specific decisions in English, this decision was widely reported in Syrian and regional media. An official text might be accessible via the CBS Arabic website or official gazettes within Syria.
   • Search Term for official Syrian sources: "قرار المصرف المركزي السوري رقم 1290/م.أ" (Central Bank of Syria Decision No. 1290/M.A)

2. Central Bank of Syria - Circular No. 147 (2022):

   • This circular reiterated the ban on all cryptocurrency dealings, emphasizing that such transactions are subject to legal penalties as they are considered a violation of financial and monetary regulations. It specifically warned against using crypto for foreign currency remittances.
   • URL: Similar to the above, direct English links are rare.
   • Search Term for official Syrian sources: "تعميم المصرف المركزي السوري رقم 147" (Central Bank of Syria Circular No. 147)

Key Takeaway: For all practical purposes, Syria views cryptocurrencies as illegal and prohibited financial instruments, not as a category that requires sophisticated securities classification. The focus is on suppressing their use rather than regulating different types of tokens.