Cryptocurrency Trading Is Strictly Prohibited In Saudi Arabia, Regulators Reaffirm Stance Against Virtual Currencies

  • Saudi Arabia's regulators have reaffirmed their stance against cryptocurrencies.
  • Crypto trading is illegal in Saudi Arabia, and claims by local websites about being "authorized" to provide crypto services are incorrect.
  • Saudi regulators have warned against the potential scams associated with virtual currencies.

Saudi Arabia’s regulatory authorities recently issued a warning stating that cryptocurrency trading is considered illegal in the country.

The Saudi Arabian Standing Committee, which monitors securities activities in the kingdom’s foreign exchange market, reaffirmed that the use of Bitcoin (BTC) and other digital currencies is strictly prohibited. Members of the regulatory committee include the nation’s Monetary Agency (SAMA), its Capital Market Authority, officials from the Ministry of Interior, the Ministry of Trade and Investment, and the Ministry of Information.

“No Parties Licensed” To Offer Crypto Services

Notably, the official announcement against crypto trading has been issued after a number of local websites and social media accounts claimed to have been licensed or “authorized” to offer crypto-related services. The Saudi Arabian Standing Committee further clarified that “no parties or individuals are licensed for such practices.”

Moreover, Saudi regulators warned the country’s residents regarding the risks involved in the cryptocurrency market. Per the kingdom’s authorities, local investors should avoid dealing in digital currencies, not only because of their volatile nature, but also due to the large numbers of scams associated with them.

Additionally, Saudi regulators said that cryptocurrency transactions can be hard to trace, and crypto-related contracts offered to investors may not be legally enforceable “as they are out of government supervision.”

“Reducing Marketing For Investment” In Virtual Currencies

While Saudi authorities have been quite clear about their stance against cryptocurrencies, they have not stated what consequences there might be for individuals and organizations who may continue to trade or invest in cryptos.

However, the standing regulatory committee has been tasked with informing the Saudi government’s officials regarding any crypto-related activities in the country. It appears that the kingdom wants to “reduce marketing for investment and trading in Forex and virtual currencies”, according to its official announcement.

Earlier in February, Crypto Globe reported that Saudi regulators had been monitoring the cryptocurrency market. Mohammed ElKuwaiz, chairman of Saudi Arabia’s Capital Markets Authority, had said that the nation’s government was “evaluating what [their] proper regulatory response should be.”

Although ElKuwaiz had also stated that Saudi regulators would “come up with something very soon”, it now seems that the country may not be as receptive to cryptos, presumably due to the increasing number of fraudulent activities associated with them.

In October, 2017, Saudi Prince Al-Waleed bin Talal, a well-known business tycoon in the Middle East, had said that bitcoin will “implode.” He also noted that cryptocurrencies “don’t make sense [because they are] not regulated” by central banks.

Notably, the Saudi Prince even said that cryptos were “Enron in the making”, which was a giant American energy and commodities trading company that filed for bankruptcy in 2001, after it was charged with corruption and accounting fraud.

 

Craig Wright Court Ruling Causes Jitters Among Nervy Investors

Neil Dennis

Some Bitcoin investors and enthusiasts are getting uncomfortable over the actions of Craig Wright, the self-proclaimed inventor of the world's largest cryptocurrency, and are beginning to fear another major downturn in the BTC price.

Wright has failed to comply with a US Federal court order instructing him to list his Bitcoin holdings prior to December 31, 2013, and could be held in contempt of court at a hearing which follows on Friday this week.

The Florida District Court order was issued under the ongoing lawsuit filed by Ira Kleiman - representing the estate of his deceased brother David Kleiman, former business partner of Wright - who claims Wright defrauded his brother out of more than a million Bitcoins following his death in 2013.

Investors Getting Nervous

Some investors are getting nervous that Wright may be ordered to repay the Kleiman estate the Bitcoin stockpile, allegedly held in a fund called the "Tulip Trust". If such a stockpile were immediately consolidated into cash it could have a significant impact on the price.

Others fear that Wright - known for his sometimes volatile and capricious behaviour and who claims to be Satoshi Nakamoto, the mysterious inventor of Bitcoin - if piqued by the court's decision on Friday could sell much or some of his own significant holdings.

One Twitter user said:

Another nervously asked a question of BitcoinSV (Satoshi Version) - a hard fork of Bitcoin Cash in November last year promoted by Wright: "Just wondering, what does the BSV community expect to happen to the coin if Craig Wright is indicted?"

According to a court filing on May 8, Wright had named seven trustees of the Tulip Trust, including himself and David Kleiman. The filing also pointed to the existence of a second Tulip Trust. 

While it remains unclear whether both, or either Wright or Kleiman created Bitcoin, the Kleiman estate's lawyer Vel Freedman has said "it is undeniable, however, that Craig and Dave were involved in Bitcoin from its inception and that they both accumulated a vast wealth of Bitcoins from 2009 through 2013".

Freedman took to Twitter last Friday saying that Wright had not complied with the court order to list his Bitcoin holdings as of the end of 2013.

While some investors may have appeared to be showing the nerves, the price of Bitcoin remained just below $11,000 by early afternoon on Monday, up 1.3% on the day. BitcoinSV, however, was down 0.4% at $238.