Cambodia Blocks 102 Websites Including Major Crypto Exchanges
The Telecommunication Regulator of Cambodia (TRC) recently issued a directive to block 102 websites, including 16 cryptocurrency exchanges such as Binance and Coinbase. This action resulted from their lack of licensing from the Securities and Exchange Regulator of Cambodia (SERC). While these websites are now inaccessible in Cambodia, their mobile applications continue to function.
Local reports indicate that the crackdown primarily targeted platforms associated with online gambling, though the inclusion of well-known crypto exchanges surprised many industry observers.
Cambodia maintains a cautious approach to cryptocurrency, with only two entities authorized to operate under the SERC’s FinTech Regulatory Sandbox program. These licensed platforms face restrictions, including prohibitions on facilitating exchanges between digital assets and fiat currencies, such as the Cambodian riel and US dollars.
Rising Crypto Scams in Cambodia
Regulatory measures in Cambodia coincide with increasing international scrutiny regarding its status as a center for cybercrime and cryptocurrency scams. The UN Office on Drugs & Crime has identified the country as a hotspot for illicit activities, including money laundering and dark web transactions involving cryptocurrencies. Criminal syndicates linked to Chinese gambling and fraud operations have trafficked approximately 30,000 individuals into Cambodia and Myanmar.
Victims are forced to create fake online profiles and engage in online scams, including fraudulent cryptocurrency schemes, often under severe duress. Many of these activities are traced back to Sihanoukville, known for illegal online gambling. Notably, Cambodia banned such gambling in 2020 following pressure from Beijing.
A Chainalysis report highlighted over $49 billion in crypto transactions connected to Huione Guarantee, a key entity within the Cambodian conglomerate Huione Group. This has increased global calls for Cambodia to enhance its regulatory framework.
Market Dynamics Amid Crackdown
The National Bank of Cambodia (NBC) has adopted a cautious stance on cryptocurrencies, prohibiting institutional trading and issuing warnings about crypto-related fraud. However, the NBC is exploring the development of a Central Bank Digital Currency (CBDC), indicating interest in blockchain technology for state-backed financial initiatives.
Despite the government’s recent actions against crypto exchanges, Cambodia remains significant in the global crypto landscape, ranking among the top 20 countries for retail crypto usage per capita. Reports suggest that 70% of crypto transactions in the country occur through centralized exchanges.
While Cambodia aims to reduce illegal activities and improve its reputation, critics argue that these measures often overlook the decentralized and borderless characteristics of cryptocurrencies. The country must find a balance between combating cybercrime and promoting a legitimate digital asset ecosystem.