Cryptocurrency Regulation in Iraq Prior to 2024

The legislative landscape for cryptocurrencies in Iraq prior to 2024 reflects a complex and cautious approach by the authorities towards this emerging technology.

Lack of Specific Cryptocurrency Laws

As of the latest information available before 2023, there was no definitive law in Iraq that explicitly allowed or prohibited the use, trade, or mining of cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and others. This absence of specific legislation led to uncertainties regarding the legal status of cryptocurrencies in the country​

​Central Bank’s Stance and Warnings

The Central Bank of Iraq had issued statements prohibiting the use of cryptocurrencies, citing concerns about their potential risks and dangers. Currency traders dealing in cryptocurrencies were warned that they could face penalties under the country’s anti-money laundering law. The Central Bank’s stance viewed cryptocurrencies as a potential threat to the stability of the national economy and expressed concerns about their potential use for illegal activities​

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Applicability of General Financial Laws

Despite the absence of specific cryptocurrency laws, certain rules and regulations were in place that affected individuals dealing with cryptocurrencies. Violations of financial regulations, including those related to cryptocurrencies, could lead to penalties such as fines or imprisonment. This implies that while there was no official ban on cryptocurrencies, their use was discouraged by the authorities. Law enforcement agencies in Iraq had strategies to combat illegal activities related to cryptocurrencies, such as fraud, money laundering, and terrorism financing. It’s important to note that existing laws related to financial transactions also applied to cryptocurrency transactions​

​Trading Not Explicitly Illegal

Despite the Central Bank of Iraq’s warnings about the risks of cryptocurrencies, trading in these digital currencies was not explicitly illegal. However, traders were advised to be aware of the potential risks and uncertainties associated with cryptocurrency trading, including issues like volatility, liquidity, and security. This indicated a somewhat grey area where trading could occur, but not without inherent risks and a lack of regulatory clarity​

​Conclusion

In summary, the legislative and regulatory environment for cryptocurrencies in Iraq up to 2023 was characterized by a lack of specific laws, coupled with a cautious approach by the Central Bank and other authorities. While there was no outright ban on cryptocurrencies, their use was not fully embraced either, with existing financial laws applicable to digital currency transactions. This created a complex legal landscape where the potential for cryptocurrencies was acknowledged, but their integration into the formal financial system was approached with caution.