Syria -- Licensing Requirements Regulatory Overview

It is crucial to understand that Syria does not have a licensing regime for cryptocurrency or virtual asset service providers (VASPs) like exchanges, custody providers, or payment processors. Instead, the Central Bank of Syria (CBS) has taken a prohibitory stance against cryptocurrencies.

Therefore, the detailed requirements for licensing, registration, capital, AML/KYC, local presence, and application processes that would normally exist in a regulated jurisdiction, simply do not apply in Syria because the activities themselves are largely prohibited.

Here's a breakdown of the situation:

Current Regulatory Stance: Prohibition

The Central Bank of Syria (CBS) has explicitly banned the use and dealing in cryptocurrencies. This stance has been communicated through official circulars.

Required Licenses (Exchanges, Custody Providers, Payment Processors):

• None are available or required. Engaging in these activities with cryptocurrencies is generally prohibited under current Syrian financial regulations.
• Any entity attempting to operate such services would be doing so outside the legal framework and would face severe legal repercussions.

Registration vs. Licensing Regime:

• Neither a registration nor a licensing regime exists for virtual assets. The regime is one of prohibition.

Key Requirements (Capital, AML/KYC, Local Presence):

• Irrelevant. Since the activities are prohibited, there are no prescribed requirements for capital, AML/KYC policies (specific to crypto, general financial AML/KYC still applies to traditional finance), or local presence for crypto businesses.

Application Process:

• There is no application process for cryptocurrency licenses or registrations, as these are not issued.

Specific Regulatory References

The primary directive prohibiting cryptocurrencies in Syria comes from the Central Bank of Syria (CBS).

1. Central Bank of Syria Circular No. 6/M.A. (2021):

   • Content: This circular, issued by the CBS, explicitly warns against dealing in cryptocurrencies, stating that they are illegal and involve high risks for users. It clarifies that cryptocurrencies are not recognized as legal tender in Syria and that dealing in them violates Syrian financial laws.

   • Specific Prohibition: It prohibits individuals and entities from creating, promoting, trading, or using any form of virtual currencies within Syria.

   • Consequences: The circular warns of legal prosecution for those found violating these directives.

   • Official URL: Finding a direct, publicly accessible, and stable URL to specific circulars on the Central Bank of Syria's website (especially older ones or those related to sensitive topics) from outside Syria can be challenging due to website structure, language barriers, and potentially limited public access to all internal directives.

     • Main Central Bank of Syria Website: http://cb.gov.sy/ (You may need to navigate the Arabic site to find specific regulations, but direct links to individual circulars are often not maintained in a public archive readily accessible.)

   • Confirmation via News Sources: The existence and content of Circular No. 6/M.A. have been widely reported by reputable financial news outlets covering the Middle East and global financial regulations, confirming the CBS's prohibitory stance.

Consequences of Non-Compliance

Operating a cryptocurrency exchange, custody service, or payment processor in Syria would be considered illegal and would likely result in:

• Legal prosecution: Imprisonment and fines.
• Asset forfeiture.
• Blocking of funds and accounts.
• Involvement in illegal financial activities, which could also have implications under international sanctions regimes due to Syria's status.

Conclusion

In summary, Syria's regulatory landscape for virtual assets is characterized by a complete prohibition rather than a licensing or registration framework. Any individual or entity considering engaging in cryptocurrency-related businesses within Syria should be aware that such activities are illegal and carry significant legal risks.

Disclaimer: This information is for general informational purposes only and does not constitute legal advice. The regulatory landscape can change rapidly, and specific legal counsel from a qualified professional familiar with Syrian law and international sanctions should be sought for any specific situation.