Yemen -- Custody Regulations Regulatory Overview

Yemen's regulatory landscape for cryptocurrencies and digital assets is highly restrictive and does not feature a framework for regulated custody services. Instead, the general stance of the Central Bank of Yemen (CBY) has been one of prohibition and warnings against dealing in cryptocurrencies.

Due to the ongoing conflict and the fractured nature of governance (with separate Central Bank entities operating in Sana'a and Aden, both claiming authority), direct and easily accessible official regulatory documents are challenging to pinpoint. However, public statements and reports from reputable news outlets consistently indicate a prohibitive stance.

Here's a breakdown of the situation regarding cryptocurrency custody regulations in Yemen:

General Stance on Cryptocurrencies in Yemen

Both the Central Bank of Yemen in Sana'a (under Houthi control) and the Central Bank of Yemen in Aden (under the internationally recognized government) have issued directives or warnings against dealing with cryptocurrencies. They view them as unauthorized, high-risk, and lacking legal tender status, posing threats to financial stability and potentially being used for illicit activities.

Therefore, specific regulations for cryptocurrency/digital asset custody, including the requirements you listed, do not exist because the underlying activity itself is largely prohibited or strongly discouraged.

Specific Custody-Related Points:

Given the general prohibition, there are no specific regulations covering the following:

1. Custodial License Requirements: No licenses are issued for cryptocurrency custody services as such activities are not recognized or permitted.
2. Segregation of Client Assets Rules: There are no rules for segregating client assets for crypto custody, as regulated custody services are not established.
3. Insurance/Bonding Requirements: No insurance or bonding requirements exist for crypto custodians.
4. Cold Storage Mandates: There are no mandates for cold storage, as the regulatory framework does not acknowledge the existence of crypto custody providers.
5. Qualified Custodian Definitions: There is no definition for a "qualified custodian" for digital assets in Yemen.
6. Any Pending Custody Legislation: There is no known pending legislation to regulate cryptocurrency custody. The focus, if any regulatory action were to be taken, would likely be on reinforcing the ban or addressing illicit uses rather than creating a framework for legitimate operations.

Regulatory References:

It is exceptionally difficult to find direct, publicly accessible links to official Central Bank of Yemen circulars or laws specifically addressing cryptocurrency custody, especially given the conflict. The most common references are news reports detailing official warnings or prohibitions.

Primary Reference Type: Statements and warnings from the Central Bank of Yemen, as reported by news agencies.

Examples of Reported Directives/Warnings (illustrative, not specific custody laws):

• Central Bank of Yemen (Sana'a Branch): In 2018-2019, the CBY in Sana'a reportedly issued warnings against dealing with cryptocurrencies, deeming them illegal and speculative.
• Central Bank of Yemen (Aden Branch): Similarly, the CBY in Aden has also warned against cryptocurrencies.

Representative News Articles (reporting on the CBY's stance):

• While a direct CBY URL is hard to come by, numerous news articles have reported on their stance. For example, reports often surface in regional media or financial news outlets:
  • General reporting on crypto bans in the region often includes Yemen. You might find references in financial news archives from outlets like Al-Monitor, Arabian Business, or local Yemeni news portals, but direct links to the official CBY announcements are often ephemeral or not publicly archived in an easily searchable manner.

Challenges in Finding Specific URLs:

• Political Instability: The ongoing civil conflict makes official government and central bank websites unstable, inaccessible, or subject to control by different factions.
• Lack of Transparency: Regulatory bodies in conflict zones often lack the resources or political will to maintain comprehensive, publicly accessible digital archives of all their directives.
• Prohibitive Stance: When an activity is prohibited, there's less incentive to publish detailed regulatory frameworks for it; rather, the focus is on blanket warnings or bans.

Conclusion:

Yemen does not have a regulatory framework for cryptocurrency/digital asset custody. The prevailing stance from both operating Central Bank entities is one of prohibition or strong discouragement of cryptocurrency activities. Therefore, none of the specific custody-related requirements you listed are applicable or regulated in Yemen. Anyone dealing in cryptocurrencies in Yemen does so at significant legal and financial risk.