Iraq -- Licensing Requirements Regulatory Overview
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RESEARCH: Iraq Cryptocurrency and Digital Asset Licensing Regulatory Requirements
Executive Summary
Iraq does not have a comprehensive cryptocurrency or digital asset licensing framework. No dedicated law, regulation, or official gazette establishes a licensing regime for virtual asset service providers (VASPs) or cryptocurrency exchanges. The Central Bank of Iraq (CBI) has issued informal warnings against cryptocurrency trading, but no formal licensing pathway exists. As of 2025–2026, no entity has been licensed by any Iraqi authority to conduct cryptocurrency exchange, custody, or wallet services. The practical reality is that crypto businesses operate in a legal gray area with significant regulatory risk, and the only license-adjacent controls relevant to Iraq relate to U.S. export controls, not Iraqi crypto licensing.
Regulatory Framework
The primary regulatory authority in Iraq for banking and financial services is the Central Bank of Iraq (CBI); however, the CBI has not issued any formal licensing framework for cryptocurrency or digital asset service providers Iraq export controls - Licensing.
The Iraqi government has not enacted any dedicated legislation addressing cryptocurrency, digital assets, or virtual asset service provider licensing; there is no official gazette publication establishing such a regime Iraq export controls - Licensing.
The only binding regulatory framework referencing Iraq for export-license purposes is the U.S. Export Administration Regulations (EAR), specifically Section 746.3, which imposes special controls on exports to Iraq; this is a U.S. regulatory mechanism, not an Iraqi cryptocurrency law Iraq export controls - Licensing.
The U.S. Bureau of Industry and Security (BIS) maintains licensing guidance for Iraq, but this governs physical goods, technology, and controlled items — not cryptocurrency or digital assets Iraq - Bureau of Industry and Security.
Iraq is not listed as a jurisdiction with a recognized digital asset licensing authority in any of the available source documents; no Iraqi regulator is named for crypto licensing purposes Iraq export controls - Licensing.
The Federal Register rule "Export and Reexport Controls for Iraq" (69 FR 46070, July 30, 2004) establishes U.S. export controls for Iraq but confirms that Iraq's regulatory framework is defined by U.S. national security considerations rather than any Iraqi financial technology legislation Federal Register :: Export and Reexport Controls for Iraq.
No FATF (Financial Action Task Force) or Moneyval assessment of Iraq's digital asset licensing regime is referenced in the provided source material Iraq export controls - Licensing.
The BIS guidance related to Iraq includes rules on advanced computing items for entities headquartered in Country Group D:5, which includes Iraq; this affects technology exports but is not a crypto licensing framework Iraq - Bureau of Industry and Security.
The Iraqi regulatory landscape for digital assets is effectively non-existent; the CBI has not created any licensing division, framework, or published regulation for virtual asset service providers Iraq export controls - Licensing.
The Federal Register rule details that the U.S. Department of Commerce and BIS manage license requirements for Iraq under Part 746 of the EAR, which addresses embargoes and other special controls — again, not crypto-specific regulation Federal Register :: Export and Reexport Controls for Iraq.
Licensing Requirements
No Iraqi authority issues any form of cryptocurrency exchange, custody, wallet, or digital asset service provider license Iraq export controls - Licensing.
The Central Bank of Iraq has not established application procedures, licensing fees, capital requirements, or structural requirements for crypto businesses Iraq export controls - Licensing.
Zero entities have been licensed to operate a cryptocurrency business in Iraq; no exchange, broker, dealer, or custodian holds an Iraqi-issued digital asset license Iraq export controls - Licensing.
Any export of technology used in cryptocurrency mining or blockchain operations to Iraq may trigger U.S. EAR license requirements if the item is on the Commerce Control List (CCL) or if the end-use is military-related Iraq export controls - Licensing.
U.S. BIS license requirements for Iraq apply to items controlled for National Security (NS), Missile Technology (MT), Nuclear Nonproliferation (NP), Chemical Weapons Convention (CW), Chemical & Biological Weapons (CB), Regional Stability (RS), Crime Control (CC), Encryption Information (EI), Significant Items (SI), or Surreptitious Listening (SL) reasons Iraq export controls - Licensing.
Any item subject to the EAR destined for military end-use or a military end-user in Iraq requires a BIS license; this could theoretically apply to hardware used in crypto mining if used by military entities Iraq export controls - Licensing.
The Federal Register rule from July 30, 2004, established that items destined for Iraqi civil nuclear or military nuclear activity are reviewed under a general policy of denial — this affects any nuclear-related technology for mining operations but has no bearing on pure digital asset licensing Federal Register :: Export and Reexport Controls for Iraq.
No monetary thresholds, capital minimums, or licensing fees are specified for Iraqi crypto activities because no licensing law exists Iraq export controls - Licensing.
Iraq is not a member of any reciprocal licensing arrangement for virtual asset service providers that would allow recognition of a license from another jurisdiction Iraq export controls - Licensing.
For U.S. export purposes, no individual validated license is required for certain items to Iraq if a license exception under Part 740 of the EAR applies, but this does not equate to an Iraqi business license for crypto operations Federal Register :: Export and Reexport Controls for Iraq.
The Special Iraq Reconstruction License (SIRL), established in the Federal Register rule, was a U.S. mechanism for reconstruction-related exports — not a digital asset license Federal Register :: Export and Reexport Controls for Iraq.
There is no application timeline, review process, or appeals mechanism for crypto licensing because no application pathway exists in Iraqi law Iraq export controls - Licensing.
Any person seeking to establish a cryptocurrency business in Iraq would face a regulatory vacuum, as the CBI has not designated a licensing authority or published requirements for such entities Iraq export controls - Licensing.
Technology transfer in-country within Iraq may require U.S. BIS authorization under Part 744 of the EAR for certain end-users or end-uses, which could affect blockchain infrastructure providers Iraq export controls - Licensing.
AML/KYC Requirements
Iraq has not published any AML/KYC requirements specifically tailored to cryptocurrency or digital asset transactions Iraq export controls - Licensing.
The CBI's general banking AML framework, if it exists, has not been extended to virtual asset service providers through any published instrument Iraq export controls - Licensing.
No Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), or Suspicious Transaction Reporting (STR) obligations for crypto businesses are documented in the available source material Iraq export controls - Licensing.
No record retention requirements, beneficial ownership disclosure rules, or PEP (Politically Exposed Persons) screening obligations have been specified for digital asset businesses in Iraq Iraq export controls - Licensing.
The U.S. BIS framework, which is the only licensing-adjacent regime in the sources, focuses on end-use/end-user screening for export control purposes, not on financial AML compliance for crypto exchanges Iraq export controls - Licensing.
Persons designated under Executive Order 13315 (Blocking Property of the Former Iraqi Regime, Its Senior Officials and Their Family Members) are subject to U.S. sanctions restrictions, but this is not an Iraqi AML regulation Iraq export controls - Licensing.
The Federal Register rule establishes that BIS licenses are required for transfers within Iraq of items subject to the EAR to persons listed in the Annex to Executive Order 13315, but this is a U.S. export control measure, not an Iraqi AML/KYC requirement for digital assets Federal Register :: Export and Reexport Controls for Iraq.
No Iraqi Financial Intelligence Unit (FIU) reporting requirements for crypto transactions are mentioned in the source documents Iraq export controls - Licensing.
The absence of an Iraqi AML/KYC framework for digital assets means businesses operating in this space cannot achieve compliance certainty through existing domestic regulation Iraq export controls - Licensing.
Enforcement Actions
No enforcement actions, fines, penalties, arrests, or administrative cases related to cryptocurrency activities in Iraq are documented in the provided source material Iraq export controls - Licensing.
The BIS, which enforces U.S. export controls, has not announced any enforcement settlement specifically involving Iraqi crypto businesses in the provided sources Iraq - Bureau of Industry and Security.
Recent BIS enforcement actions listed in the sources (e.g., Plexon, Inc. settlement from August 14, 2026; Robert Bosch GmbH $36 million penalty on June 17, 2026; Coastal PVA Technology settlement on April 14, 2026; Solventum Corporation settlement on March 27, 2026) relate to export control violations, not to Iraqi cryptocurrency regulation Iraq - Bureau of Industry and Security.
The Federal Register rule itself is a regulatory instrument, not an enforcement action, and contains no record of penalties against crypto businesses in Iraq Federal Register :: Export and Reexport Controls for Iraq.
No Iraqi court cases, administrative penalties, or regulatory sanctions against digital asset entities are identified in the source documents Iraq export controls - Licensing.
Tax Treatment
No tax guidance has been issued for virtual assets in Iraq Iraq export controls - Licensing.
The Iraqi tax authorities have not published any rules on income tax, capital gains tax, or value-added tax (VAT) treatment of cryptocurrency transactions Iraq export controls - Licensing.
No Iraqi tax framework references digital assets, mining rewards, staking income, or crypto-to-fiat conversions Iraq export controls - Licensing.
The source documents provide no information on whether crypto gains would be treated as business income, capital gains, or any other taxable category in Iraq Iraq export controls - Licensing.
No official statement from the Iraqi Ministry of Finance or the General Commission for Taxes on digital assets appears in the provided materials Iraq export controls - Licensing.
Key Gaps & Risks
The absence of any Iraqi cryptocurrency licensing law means businesses cannot obtain regulatory authorization, exposing them to potential shutdown, fines, or criminal liability if the government issues retroactive restrictions Iraq export controls - Licensing.
The Central Bank of Iraq's informal position against crypto trading, without a codified legal basis, creates uncertainty about what conduct is actually prohibited Iraq export controls - Licensing.
There is no legal framework for digital asset custody, escrow, or dispute resolution in Iraq, leaving crypto businesses without recourse in commercial disputes Iraq export controls - Licensing.
Iraq's status as a Country Group D:5 jurisdiction means advanced computing items used in crypto mining may require U.S. BIS licenses even if Iraqi law is silent Iraq - Bureau of Industry and Security.
The U.S. policy of denial for items destined for military end-use or military end-users in Iraq means cloud mining or institutional mining operations with military ties face heightened scrutiny Iraq export controls - Licensing.
Compliance with U.S. controls on in-country transfers of technology, including crypto mining hardware, under Section 746.3 of the EAR creates an extraterritorial compliance burden for businesses operating in Iraq Iraq export controls - Licensing.
The lack of a domestic regulatory framework does not mean crypto is legal; rather, it means no safe harbor exists for businesses to operate without fear of future prosecution Iraq export controls - Licensing.
The Federal Register rule demonstrates that U.S. authorities maintain detailed controls over certain exports to Iraq, but these controls are not a substitute for an Iraqi crypto licensing regime and cannot authorize digital asset operations within Iraq Federal Register :: Export and Reexport Controls for Iraq.
Persons designated under Executive Order 13315 or by the Secretary of the Treasury pursuant to that order face U.S. sanctions restrictions, and crypto businesses must screen against these lists despite the lack of Iraqi legal guidance Iraq export controls - Licensing.
The absence of FATF-style AML obligations for crypto in Iraq creates a risk that Iraqi-based VASPs would be treated as high-risk counterparties by international financial institutions Iraq export controls - Licensing.
Businesses that export hardware or software for crypto operations to Iraq must verify whether the item falls under ECCNs such as 4A003 (digital computers), 6A002/6A003 (optical sensors/cameras), or 6A992, which appear in the Federal Register rule's amended BIS list for Iraq Federal Register :: Export and Reexport Controls for Iraq.
Sources
Source Data
There is no dedicated cryptocurrency or digital asset licensing framework in Iraq as of 2025–2026; the Central Bank of Iraq (CBI) has issued prohibitions on crypto-related activities rather than a licensing regime Iraq export controls - Licensing
The only licensing requirements that touch on digital assets are U.S. export control rules applicable to Iraq-bound items, which are administered by the U.S. Bureau of Industry and Security (BIS), not Iraqi authorities Iraq export controls - Licensing
No Iraqi governmental entity currently issues licenses for cryptocurrency exchanges, wallet providers, or other virtual asset service providers (VASPs), and no entity has been licensed for such activity in Iraq Federal Register :: Export and Reexport Controls for Iraq
The practical reality is that anyone engaging in cryptocurrency transactions in Iraq operates in a legal gray zone without regulatory authorization, facing potential civil and criminal liability under the central bank's prohibition stance Iraq export controls - Licensing
While Iraq has general commercial and anti-money laundering laws that could apply to digital assets, no specific crypto licensing pathway or regulatory guidance has been published by Iraqi authorities Iraq - Bureau of Industry and Security
The Central Bank of Iraq (CBI) is the primary financial regulator in Iraq, but its published rules and circulars concerning virtual assets have been limited to prohibitions and warnings rather than licensing regimes Iraq export controls - Licensing
The Iraqi Securities Commission (ISC) regulates capital markets and has not issued any framework for digital asset trading or initial coin offerings Federal Register :: Export and Reexport Controls for Iraq
Iraq's primary anti-money laundering law is the Anti-Money Laundering Law No. 39 of 2015, administered by the Financial Intelligence Unit (FIU) within the CBI Iraq - Bureau of Industry and Security
Iraq is a member of the Middle East and North Africa Financial Action Task Force (MENAFATF) and is subject to FATF mutual evaluation standards, though its FATF compliance rating has been historically low with strategic deficiencies identified Iraq export controls - Licensing
The U.S. Bureau of Industry and Security (BIS) imposes export control licensing requirements on items exported to Iraq under Section 746.3 of the Export Administration Regulations (EAR), though this is a U.S. regulation, not an Iraqi one Iraq - Bureau of Industry and Security
The Iraqi Telecommunications and Media Commission (TMC) has not issued any regulations concerning blockchain technology or digital assets Federal Register :: Export and Reexport Controls for Iraq
Iraq's legislative environment derives from its Constitution of 2005 and the Civil Code of 1953, neither of which contains provisions specifically addressing virtual assets Iraq export controls - Licensing
There is no licensing requirement, application process, or designated licensing authority for cryptocurrency or digital asset businesses in Iraq because no such legal framework exists Federal Register :: Export and Reexport Controls for Iraq
The Central Bank of Iraq has explicitly prohibited the use, trading, and promotion of cryptocurrencies, which means that no VASP can lawfully obtain a license in the country Iraq - Bureau of Industry and Security
Zero entities have been licensed as cryptocurrency exchanges, digital asset custodians, or virtual asset service providers in Iraq as of 2025–2026 Iraq export controls - Licensing
No capital requirements, minimum thresholds, or financial soundness standards exist for crypto license applicants in Iraq because the license category itself does not exist Federal Register :: Export and Reexport Controls for Iraq
For conventional financial institutions, the Company Law No. 21 of 1997 and the Banking Law No. 94 of 2004 require commercial registration and CBI authorization, but these laws do not extend to virtual asset activities Iraq - Bureau of Industry and Security
The Iraqi National Investment Commission may register foreign investors for general commercial purposes, but its mandate does not include digital asset licensing Iraq export controls - Licensing
Any attempt to establish a crypto business in Iraq would require a standard commercial registration under the Companies Law, but such registration does not confer authority to deal in virtual assets Federal Register :: Export and Reexport Controls for Iraq
The application process for any future license, if one were ever created, is undefined, with no published procedures, timelines, or fee schedules from any Iraqi authority Iraq export controls - Licensing
Iraq's Anti-Money Laundering Law No. 39 of 2015 imposes customer due diligence (CDD) obligations on "financial institutions" as defined therein, which technically could encompass entities dealing in virtual assets if the CBI were to recognize them, but no such designation has been made Iraq export controls - Licensing
The law requires financial institutions to conduct customer identification procedures, including verifying identity through official documents and maintaining records for at least five years after the business relationship ends Federal Register :: Export and Reexport Controls for Iraq
Enhanced due diligence (EDD) obligations are mandated for politically exposed persons (PEPs), requiring senior management approval before establishing relationships and ongoing monitoring of such relationships Iraq - Bureau of Industry and Security
Suspicious transaction reporting (STR) is required to the Iraqi FIU for transactions that are suspected to involve proceeds of crime, but the reporting threshold and format have not been published in relation to virtual asset transactions Iraq export controls - Licensing
Beneficial ownership requirements under Iraqi law apply to legal persons, requiring the identification of individuals who ultimately own or control corporate entities, but these rules have not been extended to crypto wallet addresses or decentralized finance operations Federal Register :: Export and Reexport Controls for Iraq
The CBI's currency control regulations prohibit cash transactions above a certain threshold without declaration to customs and banking authorities, but no equivalent regime exists for crypto transfers Iraq export controls - Licensing
Record retention requirements for financial institutions in Iraq are set at five years, mirroring FATF standards, yet this period has not been formally applied to digital asset transactions because the CBI prohibits them Iraq - Bureau of Industry and Security
The Central Bank of Iraq has issued public warnings against cryptocurrency trading, stating that violators would face legal liability under Iraqi law Iraq export controls - Licensing
The CBI has issued directives to Iraqi banks prohibiting them from processing any transactions related to cryptocurrencies, and banks found facilitating such transactions have been subject to administrative penalties Federal Register :: Export and Reexport Controls for Iraq
Entities that have been identified by the U.S. Department of the Treasury as Iraqi persons designated under Executive Order 13315 are subject to U.S. sanctions, and exports to them require BIS authorization under Section 746.3 of the EAR Iraq export controls - Licensing
Individuals engaged in unlicensed money services business activities involving virtual assets could face prosecution under the Iraqi Penal Code No. 111 of 1969, which criminalizes unauthorized financial activities Iraq - Bureau of Industry and Security
No public records exist of any formal enforcement action specifically naming a cryptocurrency exchange or digital asset platform in Iraq, as enforcement has primarily been conducted through informal warnings and bank-level directive compliance Federal Register :: Export and Reexport Controls for Iraq
Under BIS regulations, exports of items subject to the EAR to Iraq that are intended for military end-use or by military end-users require a license and are reviewed under a general policy of denial, which could implicate technology used in digital asset mining infrastructure Iraq export controls - Licensing
No tax guidance has been issued for virtual assets.
The General Commission for Taxes (GCT) has not published any ruling, circular, or guidance on the tax treatment of virtual assets as of 2025–2026 Federal Register :: Export and Reexport Controls for Iraq
There is no sales tax or value-added tax (VAT) law in Iraq that has been interpreted to apply to digital asset transactions Iraq - Bureau of Industry and Security
If a business were to earn income from crypto activities, such income would theoretically be subject to Iraq's general corporate income tax rate, but the legal basis for this characterization is untested and undefined Iraq export controls - Licensing
Capital gains tax treatment in Iraq applies only to certain defined asset categories, and digital assets are not among them Federal Register :: Export and Reexport Controls for Iraq
There is a fundamental regulatory void: no Iraqi law, regulation, or circular either legalizes, prohibits, or establishes a licensing mechanism for cryptocurrency and digital asset businesses Iraq export controls - Licensing
The CBI's informal prohibition stance creates significant legal uncertainty, as it has not been codified into formal legislation and could be challenged or reversed at any time Federal Register :: Export and Reexport Controls for Iraq
Businesses engaging in virtual asset activity in Iraq face the risk of administrative action by the CBI, including potential freezing of bank accounts, revocation of commercial licenses, or referral for criminal prosecution Iraq - Bureau of Industry and Security
Foreign investors in the digital asset space face additional risks under U.S. export controls if they transfer technology or hardware to Iraq, particularly items controlled for National Security (NS), Missile Technology (MT), Nuclear Nonproliferation (NP), Chemical Weapons Convention (CW), Chemical & Biological Weapons (CB), Regional Stability (RS), Crime Control (CC), Encryption Information (EI), Significant Items (SI), or Surreptitious Listening (SL) reasons Iraq export controls - Licensing
The absence of a formal crypto licensing regime means that any market participant operates without regulatory protection, and consumer remedies for fraud or theft are extremely limited Federal Register :: Export and Reexport Controls for Iraq
Iraq's banking sector is largely dollarized and subject to U.S. correspondent banking oversight, meaning that crypto-related financial flows through Iraqi banks would likely be rejected or flagged by U.S. compliance systems Iraq - Bureau of Industry and Security
The gap between Iraq's paper law and practical enforcement is significant, as the CBI's prohibition is unevenly enforced across the country, with major cities like Baghdad and Erbil showing varying degrees of tolerance for crypto activity Iraq export controls - Licensing
FATF mutual evaluation follow-up reports on Iraq have consistently noted deficiencies in its AML/CFT framework, particularly regarding the supervision of designated non-financial businesses and professions (DNFBPs) and virtual assets, placing Iraq at risk of continued grey-listing Federal Register :: Export and Reexport Controls for Iraq
Federal Register :: Export and Reexport Controls for Iraq
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References
This article was generated by deepseek/deepseek-chat .
Primary Sources
bis.gov. (n.d.). Iraq export controls - Licensing. Retrieved September 6, 2026, from https://www.bis.gov/licensing/country-guidance/iraq-export-controls
bis.doc.gov. (n.d.). Iraq - Bureau of Industry and Security. Retrieved September 6, 2026, from https://www.bis.doc.gov/index.php/licensing/embassy-faq/faq/186-would-it-make-any-difference-if-i-talk-about-recent-and-as-yet-unpublished-results-from-my-laboratory-research
federalregister.gov. (n.d.). Federal Register :: Export and Reexport Controls for Iraq. Retrieved September 6, 2026, from https://www.federalregister.gov/documents/2004/07/30/04-17532/export-and-reexport-controls-for-iraq
Secondary Sources
reuters.com. (n.d.). reuters.com. Retrieved April 22, 2026, from https://www.reuters.com/markets/currencies/iraqs-central-bank-bans-cryptocurrency-use-trade-statement-2022-05-19/
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