DeFi protocol frontend in Tunisia

Cryptocurrencies are not recognized as legal tender in Tunisia.

Transactions involving cryptocurrencies are not authorized by the BCT.

Exchanges: There is no legal framework allowing the operation of crypto exchanges. Any attempt to operate one would be in violation of the BCT's stance and existing financial laws.

The BCT highlights the risks associated with virtual assets, including volatility, lack of consumer protection, money laundering, and financing of terrorism.

Law No. 2022-77 of December 26, 2022, on Combating Money Laundering and Terrorist Financing (Loi n° 2022-77 du 26 décembre 2022, relative à la lutte contre le blanchiment d'argent et le financement du terrorisme).

Definition of Virtual Asset Service Providers (VASPs): It explicitly includes VASPs as "reporting entities" (or "obliged entities" / "personnes assujetties"). While the law itself may not define all types of VASPs exhaustively, it typically covers entities that conduct one or more of the following activities for or on behalf of another natural or legal person:

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

Compliance Requirement: Tunisia is legally bound to implement UN Security Council (UNSC) resolutions that impose targeted financial sanctions. These primarily relate to counter-terrorism (e.g., against Al-Qaida, ISIL/Da'esh affiliates) and counter-proliferation of weapons of mass destruction. All financial institutions, including VASPs (once explicitly regulated or by analogy), must freeze assets and prevent funds/services from being made available to designated individuals and entities on the UN Consolidated Sanctions List.

Compliance Requirement: The FATF sets international standards for combating money laundering and terrorist financing. Tunisia, through its membership in MENAFATF, is assessed on its adherence to these recommendations. Recommendation 15 specifically addresses virtual assets and VASPs, requiring countries to regulate and supervise VASPs for AML/CFT purposes, including implementing targeted financial sanctions. VASPs are expected to conduct customer due diligence (CDD), monitor transactions, report suspicious activities, and screen against sanctions lists. The FATF "Travel Rule" (Recommendation 16) also applies to VASPs.

Entity Targeted: Iskander Najar (also sometimes reported as Islem Najar), a young Tunisian individual. Violation Type: Illegally using cryptocurrency to transfer money abroad, violating Tunisian foreign exchange laws (specifically, the prohibition on non-authorized transfers of foreign currency) and potentially money laundering charges. Penalty Amount: Initial sentence of two years in prison and a fine of 5,000 Tunisian Dinars (TND) (approximately $1,700 at the time). This sentence was later reduced on appeal. Specific details of the reduced fine are less widely reported than the prison sentence reduction.

Absence of a Legal Framework: There is no specific law or regulation defining cryptocurrencies, digital assets, or the services related to them (including custody).

Official Warnings: The BCT has issued several warnings against the use of cryptocurrencies, citing their speculative nature, lack of legal tender status, volatility, and risks associated with money laundering and terrorist financing. These warnings generally discourage engagement with these assets rather than regulate their operation.

No Licensing Regime for VASPs: Without a defined legal framework, there are no specific licensing requirements for Virtual Asset Service Providers (VASPs), including those offering custody services.