The Saudi Arabian Monetary Authority (SAMA) has taken the position that Bitcoin is now illegal in Saudi Arabia. SAMA published a warning drafted by its Standing Committee for Awareness on Dealing in Unauthorized Securities in the Foreign Exchange Market, stating that "unauthorized virtual currencies are illegal inside the Kingdom of Saudi Arabia" and then going on to note that no virtual currencies are authorized. The report explicitly noted that Bitcoin is illegal in Saudi Arabia.
Saudi Arabia is joining other countries, such as Vietnam and Bolivia in banning some or all use of Bitcoin within their countries. This creates unique problems for users of Bitcoin and other cryptocurrencies, because of their decentralized and anonymous nature. Often those engaging in transactions in Bitcoin are unaware of the geographic location of the transaction counterparties. This includes companies operating applications that can be accessed and used from any geographic location. Illegalizing cryptocurrencies creates the legal risk that governments, such as Saudi Arabia, who have implemented a ban will conclude that anyone who conducts transactions using cryptocurrencies with people within their geographic boundaries, even unknowingly, have violated the law. While there has not been a trend in such aggressive application of bans on cryptocurrency, this adds to the regulatory and legal uncertainty that recently has slowed the implementation of cryptocurrency technology by FinTech companies.
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