Remote VASP serving residents in Zambia
Foreign-incorporated entity that offers exchange, custody, or transfer services to residents of a jurisdiction without establishing a local entity or office.
Remote VASP is conditionally permitted in Zambia without local incorporation, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- No
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- General AML/CFT obligations under the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010 may apply if the entity is classified as a financial institution or DNFBP — but no VASP-specific AML framework exists yet.
- No Travel Rule obligations applicable — FATF standards on virtual assets have not been transposed into domestic law.
- No specific AML/CFT registration or licensing regime for VASPs currently exists (ESAAMLG 2019 MER confirmed this gap).
- If the entity engages in activities that could constitute money laundering or terrorist financing, general penalties under the 2010 Act (severe fines and imprisonment) would apply.
Key Restrictions
- Cryptocurrencies are not recognized as legal tender in Zambia (BoZ repeated warnings).
- No specific license for virtual asset service providers (VASPs) or crypto custodians exists — the operating model exists in a 'grey area' with no regulatory pathway to compliant licensing.
- Bank of Zambia has issued ongoing public warnings advising against dealing in crypto assets, stating engaging is at the consumer's own risk with no investor protection.
- The National Payment Systems Act 2023 may be used as a basis to regulate payment-related virtual asset services in the future, but has not yet been applied to crypto.
Key Risks
- High enforcement ambiguity — no VASP-specific licensing regime means a remote operator cannot obtain a license, leaving them in an unregulated grey zone that could be retroactively targeted.
- Bank of Zambia has repeatedly warned the public against crypto risks (fraud, volatility, lack of protection), creating reputational and PR exposure for any operator serving Zambian residents.
- ESAAMLG 2019 Mutual Evaluation Report flagged Zambia's lack of VASP regulation as a gap, increasing pressure for future enforcement actions against unregulated operators.
- General fraud-related law enforcement actions possible even absent specific crypto regulation — police may pursue cases involving crypto under broader criminal law.
- The BoZ and government are actively developing a virtual asset framework (including a potential sandbox), which could impose retroactive compliance obligations or lead to sudden enforcement shifts.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Unregulated, but Not Banned: Crypto trading and the operation of crypto exchanges in Zambia are not explicitly illegal, but they are also not officially regulated or licensed by any specific framework for virtual assets. This places them in a "grey area."
Regulatory Warnings: The Bank of Zambia has repeatedly issued warnings to the public regarding the risks associated with investing in or trading cryptocurrencies. Key points of these warnings include:
Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Zambia.
No Investor Protection: Since they are unregulated, consumers engaging in crypto transactions do so at their own risk, with no recourse to the BoZ or other regulatory bodies for protection against loss, fraud, or operational failures of exchanges.
National Payment Systems Act, No. 2 of 2023:
No, not specifically for virtual assets and VASPs. Zambia's primary AML/CFT legislation, the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010 (and its amendments), as well as associated regulations, does not explicitly extend to the comprehensive regulation of virtual assets or the oversight of VASPs as financial institutions or Designated Non-Financial Businesses and Professions (DNFBPs).
The ESAAMLG's 2019 Mutual Evaluation Report of Zambia highlighted significant gaps in this area. It noted that virtual assets were not adequately covered by the AML/CFT framework, and there was no specific licensing or registration regime for VASPs.
Which VASPs are Covered:
Currently, none are explicitly covered under a specific regulatory regime for virtual assets. As per the 2019 ESAAMLG MER, Zambia had not identified or defined VASPs under its AML/CFT laws, nor had it imposed AML/CFT obligations on them. Any entity operating with virtual assets in Zambia currently does so in a largely unregulated environment from an AML/CFT perspective, though the Bank of Zambia has issued warnings regarding the risks associated with cryptocurrencies.
However, if an entity were found to be involved in money laundering or terrorist financing activities using virtual assets, they would be subject to the general penalties under the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010, which include severe fines and imprisonment.
Currently, there are no specific licenses for crypto asset custodians in Zambia. Financial institutions dealing with traditional securities or funds require licensing from the Bank of Zambia or the Securities and Exchange Commission, but these licenses do not extend to, nor are there separate licenses for, digital asset custody.
Bank of Zambia's Fintech Regulatory Sandbox and Virtual Assets Framework: In recent years, the Bank of Zambia has indicated its intention to develop a comprehensive framework for virtual assets. This includes exploring the possibility of a regulatory sandbox for fintech innovations, which could eventually lead to specific regulations for digital asset service providers, including custodians.
Regulator Name: Bank of Zambia (BoZ)
Lack of a Specific Regulatory Framework: As of now, there isn't a comprehensive regulatory framework specifically governing cryptocurrency exchanges or services that would allow for detailed enforcement actions akin to those seen in more established crypto jurisdictions.
General Fraud vs. Regulatory Enforcement: While there might be instances of law enforcement (police) dealing with fraud cases where cryptocurrencies were used, these are distinct from regulatory enforcement actions by financial regulators against crypto businesses for operating without a license or violating financial laws.
Caution and Warnings: The Bank of Zambia consistently advises against the use of cryptocurrencies due to risks and their unregulated status.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a remote VASP serving Zambian residents currently operates in a legal grey area (not explicitly banned but unregulated, with no licensing pathway for VASPs, no legal tender status, and repeated BoZ warnings against crypto use); a prospective regulatory framework is under development but not yet in force.
Questions this verdict aims to answer
- May a non-resident provider serve residents from abroad?
- Does cross-border service trigger licensing, registration, or AML obligations?
- What enforcement risk exists for unlicensed remote operators?