Cambodia Bans 16 Major Cryptocurrency Exchanges, Including Binance, OKX, and Coinbase

Cambodia has moved to block access to 16 major cryptocurrency exchanges, including popular platforms like Binance, OKX, and Coinbase, in an effort to curb rising crypto-related crimes and to enforce its regulatory framework for digital assets. According to Nikkei Asia, the ban affects 102 online domains, many of which are associated with online gambling linked to these exchanges. This restriction follows the failure of these exchanges to obtain the necessary licenses from Cambodia’s Securities and Exchange Regulator (SERC), which is a requirement for operating legally within the country.

Although the websites of the exchanges are blocked, mobile applications remain operational. The move is part of Cambodia’s broader initiative to regulate and control its growing cryptocurrency market, which is expected to reach a revenue of $8 million in 2024. However, growth in the digital assets sector is expected to slow down by 2025.

Regulatory Background and Context

Binance, one of the exchanges banned, has had a history of cooperation with Cambodia, including signing a memorandum of understanding (MoU) with the SERC in 2022 to assist in the creation of digital currency regulations. Binance also partnered with Cambodia’s Royal Group to promote blockchain adoption and provided training to the country’s Interior Ministry officials in June 2023 on how to detect crypto-related crimes. Despite these efforts, Binance has now found itself on the blacklisted list.

The exchanges are required to be licensed under the FinTech Regulatory Sandbox, a controlled program overseen by Cambodia’s Non-bank Financial Services Authority (NBFSA). At present, only two companies are licensed to trade digital assets in Cambodia, but the lack of ability to exchange digital assets for the Cambodian Riel (KHR) or U.S. dollars has left the local crypto market largely ineffective.

The Growth of Cryptocurrency in Cambodia

The move to regulate cryptocurrency in Cambodia comes at a time when crypto-related scams are on the rise. According to the United Nations Office on Drugs and Crime (UNODC), crypto scams are becoming more prevalent, with cybercriminals using cryptocurrencies for illicit activities such as money laundering. Furthermore, some platforms like Huione Guarantee, which have been linked to cybercriminal activities in Southeast Asia, are tied to Cambodian conglomerates like Huione Group.

In response to these challenges, the Cambodian government is focusing on creating a comprehensive regulatory framework for digital assets and decentralized finance (DeFi) systems. This will be part of the country’s ongoing efforts to combat financial crimes and ensure that the digital assets sector is more organized and transparent.

The Future of Digital Assets in Cambodia

Looking forward, Cambodia’s digital asset market is expected to evolve over the next few years. As the country builds a more structured regulatory environment, it aims to regulate the use of digital assets and tackle financial crimes more effectively. The Royal Government is focusing on establishing clear rules that will guide the growth of the crypto and DeFi sectors, helping to ensure that they align with Cambodia’s broader financial and economic goals.

The Cambodian FinTech Development Policy sets the stage for future growth, which may include creating opportunities for crypto exchanges that meet the country’s licensing requirements. However, as it stands, the current crypto landscape remains highly controlled, with many exchanges still unable to operate legally within the country.

Cambodia’s decision to ban 16 major cryptocurrency exchanges, including some of the largest names in the industry, underscores the country’s growing concerns over the potential for financial crime within the crypto space. While the government is taking steps to regulate and control the sector, the lack of fully functional exchanges and the rise of scams indicates that the crypto market in Cambodia is still in its early stages of development. With more structured regulation expected in the coming years, Cambodia aims to balance the growth of digital assets with effective oversight to combat illicit activities.