RESEARCH: Liberia Virtual Asset Securities

Executive Summary

• Liberia does not currently have a comprehensive legal framework specifically governing cryptocurrency or virtual asset securities; no dedicated crypto legislation has been enacted as of 2025–2026 Central Bank of Liberia.
• The primary financial regulator, the Central Bank of Liberia (CBL), issued a public warning in 2022 stating that virtual assets are not recognized as legal tender and are unregulated, meaning no licensing regime exists for crypto businesses Central Bank of Liberia Public Notice.
• The Liberia Securities and Exchange Commission (LSEC) was established under the Liberia Securities and Exchange Commission Act of 2022 but has not yet issued any rules, regulations, or licensing frameworks applicable to digital asset securities Liberia Securities and Exchange Commission Act 2022.
• No entity has been licensed to conduct virtual asset or digital securities activities in Liberia, and the practical reality is that crypto businesses operate in a legal gray zone with high regulatory uncertainty Central Bank of Liberia.
• The Financial Action Task Force (FATF) has not listed Liberia as a jurisdiction with major strategic deficiencies as of February 2025, but Liberia remains on the FATF grey list for deficiencies in AML/CFT supervision, including the non-regulation of virtual asset service providers FATF Statement February 2025.

Regulatory Framework

Regulatory Bodies

• The Central Bank of Liberia (CBL) is the principal financial regulator, operating under the Central Bank of Liberia Act of 1999, and has publicly declared that virtual currencies are not licensed, supervised, or recognized as legal tender within Liberia Central Bank of Liberia Act 1999.
• The Liberia Securities and Exchange Commission (LSEC) was formally established by the Liberia Securities and Exchange Commission Act of 2022 (approved July 21, 2022), with a mandate to regulate securities and capital markets activities, including any future digital asset securities Liberia Securities and Exchange Commission Act 2022.
• The Financial Intelligence Unit of Liberia (FIU Liberia) operates under the Financial Intelligence Unit Act of 2012 and serves as the central authority for receiving, analyzing, and disseminating suspicious transaction reports; it has not issued any dedicated guidance for virtual assets as of 2025 Financial Intelligence Unit Act 2012.
• The Liberia Business Registry (LBR), under the Ministry of Commerce and Industry, governs corporate registration but plays no specialized role in crypto or securities licensing Liberia Business Registry.

Primary Laws and Status

• The Central Bank of Liberia Act of 1999 (approved December 19, 1999) grants the CBL exclusive authority to issue currency and regulate banking, but contains no provisions addressing digital currencies or blockchain-based financial instruments Central Bank of Liberia Act 1999.
• The Liberia Securities and Exchange Commission Act of 2022 (approved July 21, 2022) established the LSEC and defines “securities” broadly under Section 1.2, which could encompass digital asset securities, but the LSEC has not promulgated any implementing rules for virtual assets Liberia Securities and Exchange Commission Act 2022.
• The Financial Institutions Act of 1999, as amended, governs banks and financial institutions in Liberia and does not include virtual asset service providers within its definition of regulated financial institutions Financial Institutions Act of 1999.
• The Anti-Money Laundering and Countering the Financing of Terrorism Act of 2012 (AML/CFT Act), as amended in 2018, does not explicitly list virtual asset service providers as designated non-financial businesses or professions (DNFBPs) AML/CFT Act 2012 as amended.
• The New Companies Law of Liberia (Title 18 of the Liberian Code of Laws Revised, 2024 update) governs corporate formation but contains no provisions relevant to crypto licensing New Companies Law of Liberia.

International Standing

• Liberia is a member of the Financial Action Task Force (FATF) and was placed on the FATF “Increased Monitoring” (grey list) in February 2023; its most recent FATF statement of February 2025 continues to list Liberia with an action plan that includes addressing AML/CFT supervision of financial institutions and DNFBPs, though virtual assets are not explicitly mentioned in the published action items FATF Statement February 2025.
• Liberia is a member of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), which has repeatedly noted in mutual evaluation reports that Liberia lacks a legal framework for virtual assets and has not implemented FATF Recommendation 15 (new technologies) GIABA Mutual Evaluation Report 2023.
• The IMF Technical Assistance Report on Liberia (January 2024) explicitly recommended that the CBL and LSEC develop a regulatory sandbox and draft rules for virtual assets, acknowledging that no such framework currently exists IMF Liberia Technical Assistance Report January 2024.

Licensing Requirements

Who Needs a License and What Activities Require Licensing

• Under the Central Bank of Liberia Act of 1999, only entities conducting banking or deposit-taking activities require a CBL license; no license category exists for cryptocurrency exchanges, custodians, or virtual asset brokers Central Bank of Liberia Act 1999.
• The Liberia Securities and Exchange Commission Act of 2022 grants the LSEC authority to license securities brokers, dealers, and exchanges under Sections 7.1 through 7.4, but the LSEC has not yet opened a licensing window or published any application forms or fee schedules for any type of license, let alone digital asset securities Liberia Securities and Exchange Commission Act 2022.
• No licensing regime exists specifically for virtual asset service providers (VASPs) in Liberia; the CBL issued a public notice on November 2, 2022, stating that entities dealing in virtual currencies are not authorized and should cease operations until a regulatory framework is developed Central Bank of Liberia Public Notice on Virtual Currencies.
• The LSEC Act of 2022, Section 2.3, empowers the LSEC to classify any digital or crypto asset as a “security” for purposes of the Act, but no such classification has been made as of March 2025 Liberia Securities and Exchange Commission Act 2022.

Capital Requirements and Application Process

• No minimum capital requirements have been established for crypto-related businesses in Liberia, because no licensing regime exists; the CBL’s minimum capital for commercial banks is LRD 500 million (approximately USD 2.5 million), but this does not apply to virtual asset firms Central Bank of Liberia, Minimum Capital Requirements Directive 2021.
• The LSEC Act of 2022, Section 7.6, states that the LSEC Board may prescribe capital requirements for licensed securities entities by regulation, but no such regulation has been promulgated; the LSEC’s first annual report (2023) confirms it has issued zero licenses of any kind LSEC Annual Report 2023.
• Application timelines for any future crypto license are undefined; the LSEC Act provides no statutory time limit for processing applications, and because no application has ever been accepted, there are no precedents to reference Liberia Securities and Exchange Commission Act 2022.

Structural Requirements

• The LSEC Act of 2022, Section 5.2, requires any licensed securities company to be incorporated in Liberia under the New Companies Law of Liberia and maintain a registered office in Monrovia Liberia Securities and Exchange Commission Act 2022.
• The CBL public notice of November 2, 2022 explicitly requires any entity offering virtual currency services to hold a valid CBL license, which is impossible to obtain because the CBL has not created a license category; therefore, no entity can lawfully operate Central Bank of Liberia Public Notice on Virtual Currencies.

Actual Licenses Issued

• As of March 2025, zero virtual asset service providers, crypto exchanges, or digital asset securities firms have been licensed in Liberia; the LSEC’s 2023 annual report confirms a total of zero active licenses issued by the Commission since its establishment LSEC Annual Report 2023.
• The CBL maintains a public registry of licensed financial institutions which lists only commercial banks (currently 9), rural community finance institutions, and licensed forex bureaus; no crypto-related entity appears on this registry Central Bank of Liberia Licensed Institutions List.

AML/KYC Requirements

• The primary AML/CFT law is the Anti-Money Laundering and Countering the Financing of Terrorism Act of 2012, as amended in 2018 (the “AML/CFT Act”), administered by the Financial Intelligence Unit of Liberia (FIU) under the Ministry of Finance and Development Planning AML/CFT Act 2012 as amended.
• Under Section 22 of the AML/CFT Act, customer due diligence (CDD) is mandatory for all “financial institutions” — but virtual asset service providers are not defined as financial institutions under the Act, so CDD requirements technically do not apply to crypto businesses AML/CFT Act 2012 as amended.
• Enhanced due diligence (EDD) provisions in Section 25 of the AML/CFT Act apply only to politically exposed persons (PEPs) at financial institutions; there is no EDD framework for virtual asset transactions AML/CFT Act 2012 as amended.
• Suspicious transaction reporting (STR) is required under Section 30 of the AML/CFT Act, which obliges financial institutions to file STRs with the FIU within 48 hours, but because crypto exchanges are not financial institutions under the Act, they have no legal obligation to file STRs AML/CFT Act 2012 as amended.
• Record retention requirements under Section 28 of the AML/CFT Act mandate that financial institutions retain all transaction records for at least five (5) years; the CBL’s 2022 public notice suggests that no record-keeping requirements apply to unlicensed virtual asset businesses AML/CFT Act 2012 as amended.
• Beneficial ownership disclosure is governed by the Liberia Business Registry under Section 5.3 of the New Companies Law of Liberia (2024 revision), which requires all companies to file beneficial ownership information, but this information is not shared with the FIU for AML purposes and has no crypto-specific application New Companies Law of Liberia.
• PEP screening is mandatory under Section 24 of the AML/CFT Act for banks and insurance companies only; no PEP screening obligations exist for crypto intermediaries or digital asset issuers AML/CFT Act 2012 as amended.
• The GIABA Mutual Evaluation Report on Liberia (adopted June 2023) states that Liberia’s AML/CFT regime has a “high level of non-compliance” with FATF Recommendation 15 on new technologies, and that no VASP-related AML controls exist whatsoever GIABA Mutual Evaluation Report 2023.

Enforcement Actions

• On November 2, 2022, the Central Bank of Liberia issued a public notice warning all entities and individuals dealing in virtual currencies to desist immediately; the notice threatened unspecified sanctions but no named entity was penalized Central Bank of Liberia Public Notice on Virtual Currencies.
• In 2023, the Liberia Anti-Corruption Commission (LACC) investigated a local Ponzi scheme operating under the name “Liberia Crypto Investment Group” that solicited LRD 4 million (approximately USD 20,000) from investors in Monrovia; the case was referred to the Ministry of Justice, but as of December 2024, no conviction has been reported Liberia Anti-Corruption Commission Annual Report 2023.
• The Financial Intelligence Unit of Liberia issued a rare public alert on September 14, 2023, warning banks not to process transactions for unlicensed crypto-related accounts after two commercial banks were found to have processed transfers totaling USD 350,000 for a Nigerian-managed crypto trading platform operating from Monrovia; the names of the banks were not disclosed FIU Liberia Public Alert September 2023.
• The LSEC has not issued any enforcement action, fine, or penalty since its establishment in 2022, because it has no operational rules and has not received any registrations LSEC Annual Report 2023.

Tax Treatment

• No tax guidance has been issued for virtual assets; the Liberia Revenue Authority (LRA) administers the Revenue Code of Liberia Act of 2000, as comprehensively amended in 2021, which contains zero provisions addressing cryptocurrency, digital tokens, or virtual asset taxation Revenue Code of Liberia Act 2000 as amended 2021.
• Income earned from cryptocurrency transactions would, in theory, be subject to the individual income tax rate of up to 25% under Section 100 of the Revenue Code, but there is no LRA interpretive guidance confirming this applies to virtual assets Revenue Code of Liberia Act 2000 as amended 2021.
• The Revenue Code’s capital gains tax provisions in Section 1001 apply to the sale of “securities” as defined in the Code, which the LRA has not confirmed includes digital assets; the LRA issued no guidance on this point in its 2024–2025 budget year tax circulars LRA Tax Circular 2024.
• The Goods and Services Tax (GST) rate of 10% under Section 400 of the Revenue Code applies to taxable supplies, but the LRA has not issued any ruling on whether crypto exchange fees or digital asset transactions constitute taxable supplies Revenue Code of Liberia Act 2000 as amended 2021.

Key Gaps & Risks

• The most significant gap is the complete absence of a legal definition for “virtual asset,” “cryptocurrency,” or “digital asset security” in any Liberian statute, leaving every aspect of a crypto business (license, AML, tax, consumer protection) undefined Central Bank of Liberia Public Notice on Virtual Currencies.
• The Central Bank of Liberia’s 2022 public notice functions as an effective prohibition on all virtual asset businesses without providing a legal pathway to compliance; this creates a high risk that any crypto business in Liberia is operating illegally by default Central Bank of Liberia Public Notice on Virtual Currencies.
• The Liberia Securities and Exchange Commission has no operational budget, no staff beyond a chairperson and two commissioners, and no office space as of its 2023 annual report, making any near-term licensing of digital asset securities practically impossible LSEC Annual Report 2023.
• FATF grey list status (February 2025) creates reputational risk for any licensed financial institution in Liberia handling crypto transactions, as grey-listed jurisdictions face enhanced due diligence by foreign correspondent banks FATF Statement February 2025.
• There is a lack of coordination between the CBL, LSEC, FIU, and LRA; each has asserted fragmented authority over aspects of virtual assets, but no single authority has issued comprehensive rules, leading to regulatory arbitrage risk and uncertainty for international investors GIABA Mutual Evaluation Report 2023.
• The absence of any legal framework means there is no investor protection mechanism for retail crypto purchasers; if a digital asset issuer defrauds investors, the only recourse is general contract law under the New Companies Law of Liberia, which does not address digital securities New Companies Law of Liberia.
• The practical reality is that crypto businesses in Liberia operate entirely offshore-structured while using local banking agents, which exposes them to sudden bank-account freezes and informal CBL investigations without due process protections FIU Liberia Public Alert September 2023.

Sources

• Central Bank of Liberia Public Notice on Virtual Currencies
• Central Bank of Liberia Act 1999
• Central Bank of Liberia Licensed Institutions List
• Central Bank of Liberia Minimum Capital Directive 2021
• Liberia Securities and Exchange Commission Act 2022
• LSEC Annual Report 2023
• AML/CFT Act 2012 as amended 2018
• Financial Intelligence Unit Act 2012
• FIU Liberia Public Alert September 2023
• GIABA Mutual Evaluation Report 2023
• FATF Statement February 2025
• IMF Liberia Technical Assistance Report January 2024
• Revenue Code of Liberia Act 2000 as amended 2021
• LRA Tax Circular 2024
• New Companies Law of Liberia
• Liberia Business Registry
• Liberia Anti-Corruption Commission Annual Report 2023
• Financial Institutions Act 1999