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Cryptocurrency Trading is Illegal in Saudi Arabia

State officials in Saudi Arabia have reminded citizens that trading in cryptocurrency is illegal in the country. This reminder comes following the recent emergence of virtual currency trading promotions in the Arab nation.

No Cryptocurrency Trading License in Saudi Arabia

The Kingdom of Saudi Arabia recently reinforced its stance on the illegality of cryptocurrency trading in the country. In addition, the government created a standing committee headed by the Capital Market Authority to oversee the enforcement of the prohibition. Other members of the committee include representatives of the Ministry of Interior, the Ministry of Information, the Ministry of Trade and Investment, and the Saudi Arabian Monetary Agency (SAMA).

The standing committee debunked the claims made by some websites, saying:

The claims of these websites that they are authorized by official authorities in the kingdom are incorrect and that no parties or individuals are licensed for such practices.

The Risks Associated with Cryptocurrency Trading

The standing committee also warned Saudi Arabians about the risks involved with investing in digital currencies. The reasons given include volatility of the crypto market, potential scams, anonymity, and the presence of unenforceable or fictitious contracts. The committee also noted that cryptocurrency trading is outside the scope of government supervision and is also notorious for its use in illicit activities.

Currently, the committee is working with relevant bodies to reduce such marketing activities. This is not just for digital currency trading, as it also includes forex trading on sites not regulated by SAMA. For clarity purposes, investors should refer to the relevant government’s entity website for details of licensed entities.

Cryptocurrency Trading in the Arab World

In January 2018, ArabiaChain, a Dubai-based blockchain start-up, launched a new digital asset exchange, Palmex. This new platform allows users to deposit and trade digital coins including Bitcoin, Ethereum, DubaiCoin, and several others.The platform offers free registration but charges discounted fees on deposits, withdrawals, and trading.

In Egypt, the Grand Mufti, Sheikh Shawki Allam, endorsed a ban on digital currency trading, saying that it is fraudulent, cheating, and forbidden in Islam.

Blockchain Technology Adoption in Saudi Arabia

In February 2018, Saudi Arabian bank, Al Rajhi Bank, announced that it had run a successful trial using Ripple technology. This trial involved using Ripple technology to transfer money from Saudi Arabia and Jordan between bank branches. Still, in February, the Central Bank of Saudi Arabia signed an agreement with Ripple to help banks in the kingdom improve payments infrastructure using xCurrent. Saudi Arabia’s SAMA is the first ever central bank to use this program. On July 11, 2018, it was reported that the municipality of Riyadh, had partnered with IBM. The purpose of this partnership was to execute a series of blockchain technologies in diverse administrative and economic areas.

What do you think about the state of the Saudi Arabian cryptocurrency market? Let us know your thoughts in the comment section below.

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Report: China’s Cryptocurrency Ban Sees Successful Results

China – Late last year as Bitcoin ran up to all-time highs, China’s government imposed a controversial ban on cryptocurrencies. This move caught many off-guard, as China has historically been a country of cryptocurrency development and interest.

Recent data from the People’s Bank of China (PBC) indicate that the unwelcome crackdown was met with widespread success, with the PBC noting that cryptocurrency trading in China has all but gone away.

The Asia Times, a popular Hong Kong-based media source, recently reported that the Chinese yuan (RMB) is now utilized in less than 1% of all Bitcoin exchange trades. This 1% figure is a far cry from just one year ago, where the BTC/RMB pair accounted for over 90% of all global trades before the ban fell into place.

Guo Dazhi, research director at Zhongguancun Internet Finance, discussed his thoughts on the ban with news source GlobalTimes, saying:

This indicates that the policy has been very successful. It is within expectations that the yuan’s share in global Bitcoin transactions would drop after China announced the ban.

The report further notes that Chinese regulators have not thought about lifting the ban on cryptocurrency trading within the near future, citing large financial risks for Chinese investors. 

Chinese media also claims that regulators have shut down 88 cryptocurrency exchange establishments, and 85 ICO projects since the ban occurred. However, some exchanges have escaped the heat, with Binance, OKEx, and Huobi recently establishing operations in more crypto-friendly nations. 

However, these regulatory actions were not enough for Chinese authorities, as regulators utilized the “Great Firewall of China” to block exchanges, cryptocurrency services, and ICO sites that are based overseas. As of the end of May, Chinese authorities had blocked over 110 websites which hold relations to the cryptocurrency industry, including Binance and Huobi.

Zhang Yifeng, a blockchain analyst at Zhongchao Credit Card Industry Development gave insight about the regulatory move, stating:

The timely moves by regulators have effectively fended off the impact of sharp ups and downs in virtual currency prices and led the global regulatory trend.

Blockchain, But No Cryptocurrencies? 

Despite holding negative sentiment towards cryptocurrencies, the Chinese government seems to be in love with the concept of blockchain technologies. In a recent speech, Chinese President Xi Jingping, expressed his admiration for blockchain technology, adamantly stating:

A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications.

In May, Huobi announced the creation of a “Creative Blockchain Lab” in China’s Hainan Province. According to the Huobi press release, this $1 billion move was sponsored and planned in collaboration with Xi Jingping, along with Chinese regulators. Huobi noted:

It is a national-level strategy that President Xi Jiping, personally planned, personally deployed, and personally promoted.

This is just one of the many moves that indicate that China is moving towards utilizing blockchain technologies in their traditional systems, but maybe not cryptocurrencies, or at least for now anyway.

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Facebook Reintroduces Cryptocurrency Ads After January Ban

Facebook Announces Reversal Of Cryptocurrency Ad Ban

In January, Facebook imposed a ban on cryptocurrency-related advertisements, citing that companies in the industry were “not currently operating in good faith.” This statement alludes to the countless scams seen in the space, most notably, the high number of fraudulent ICOs and Ponzi schemes like BitConnect.

It is likely that Facebook saw the over $1 billion collapse of BitConnect at the beginning of January and wanted nothing to do with such a scheme. Nevertheless, the social media giant still noted that it would be revisiting the policy over time and would make any changes if deemed necessary.

Other technology service companies, like Google and Twitter, followed suit by introducing similar bans in the months following Facebook’s announcement. Although seen as a negative sign by most, others thought that it was the responsibility of these companies to protect their consumers.

However, with this recent ban reversal, Facebook hopes to reintroduce cryptocurrency companies back to its expansive ad ecosystem. Advertisers will be required to gain approval from the platform before promoting their crypto products.

Restrictions Still Apply

At the time of writing, ads promoting binary options and initial coin offerings are still banned due to the questionable nature of some of these operations.

All ads that do not fall into the restricted category will be permitted to submit ads through Facebook’s ad application system, starting today. In the aforementioned application, Facebook will specifically ask potential advertisers for information pertaining to the legitimacy of the cryptocurrency operation.

A blog post from the social media company stated:

Advertisers wanting to run ads for cryptocurrency products and services must submit an application to help us assess their eligibility — including any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business.

This system should allow for Facebook employees to determine the ‘bad apples’ from the ‘good apples’, only allowing bona fide and reliable companies to advertise their product or services.  

However, Facebook product manager, Rob Leathern also wrote:

Given these restrictions, not everyone who wants to advertise will be able to do so.

Despite these restrictions, this improved and more robust system should allow for legitimate cryptocurrency companies, like well-known exchanges or established infrastructure services to get their names out to more consumers.

Facebook is the first company to reverse such a ban, with Google, Twitter and Snapchat still holding bans against the industry. Google chalked their ban up to the “unregulated” and “speculative” nature of products and services advertised under the Google Ads umbrella.

It is unclear if Google or any other technology companies will be changing their policies on cryptocurrency ads any time soon. But many in the industry hope for the best, as Facebook’s recent announcement shows how this issue should specifically be addressed.

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Report: Kazakhstan's Central Bank Wants to Ban Cryptocurrencies

The National Bank of Kazakhstan wants to ban cryptocurrency trading and mining in the European nation, its chairman said.

Speaking to Sputnik News, Daniyar Akishev said the central bank is “taking [a] very conservative approach” towards cryptocurrencies, looking for “extremely tough restrictions.”

To that end, he told the Russian government news site, he wants to ban all crypto exchanges and prevent residents from converting the nation’s fiat currency into any form of cryptocurrency.

In addition, he said he wants to ban cryptocurrency mining within Kazakhstan’s borders, telling Sputnik:

“We minimize the risks related to the national market. However, no central bank has all the instruments to control this market in the cross-border market. Therefore, at least, we must prevent this risk via the national currency.”

The bank – and other government agencies – believe that cryptocurrencies are “an ideal instrument for money laundering and tax evasion,” he said.

Despite the chairman’s words, it does not appear that there are any regulations, laws or bills aimed at curbing the use of cryptocurrencies in Kazakhstan at present.

Kazakhstan flag image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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South Korean Government Nearing Ban on Cryptocurrency

Investors and traders in the crypto-market are feeling the pressure of a potential ban on digital currencies in South Korea. The nation’s government has been involved in discussions regarding the rising influence of cryptocurrency over the past few weeks. South Korea stood as one of the optimistic hubs for the crypto-world at the end of 2017 with possession of controlling exchanges and influential tokens. The tide has swiftly turned following a tightening of regulations that may result in the ultimate ban by the end of it all.

National bans against cryptocurrencies are hardly anything new. China was positioned at the top of the market; playing host to nearly 90% of all transactions in the beginning of 2017. Without regulation and protection of parties involved, federal legislation came down closing exchanges and forcing citizens to resume their own trading in Hong Kong. Global super power subsequently spoke out against the use of digital tokens (Bitcoin, Ethereum, Litecoin, etc.) with leading officials claiming the nation would never recognize the tender. Indonesia’s central bank, Bank Indonesia, is also in headlines warning against the dangers of cryptocurrency.

Increasingly negative headlines in the news have cast a shadow over some of the most prominent tokens:

Value ($) Change (%)
Bitcoin (BTC) 11,757.40 -15.05
Bitcoin Cash (BCH) 1,906.78 -22.85
Ethereum (ETH) 1,050.60 -21.01
Litecoin (LTC) 192.59 -19.09

Rumors regarding a potential tightening of the market gained traction late last year, prompting citizen involvement. Involved traders and investors have taken to petitions in hopes of gaining governmental attention. Total signatures are now over 200,000 – a threshold set to be achieved by the end of January. With such clear support for the exchanges, hedging towards a ban may be slowed.

South Korea is not placing a ban just yet, but cryptocurrency values are taking a major hit because of the speculation. Limited utility from tokens keep the market in a very speculative state. A volatile environment has quickly changed the social view of crypto with increasing numbers of sales in the short-term. Many investors who targeted a quick return following the regular spike in prices during November and December have been forced into long positions. Selling at present can help minimize existing losses, but holding maintains the same upside it did a few weeks ago. Until the Korean government officially makes a decision, crypto has an out.