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Cambodia’s government has blocked access to 16 cryptocurrency exchange websites, including major players like Binance, Coinbase, and OKX, citing the lack of licenses with the Securities and Exchange Regulator of Cambodia (SERC).
The move comes as Cambodia faces international scrutiny over its reputation as a hub for online scams, including cyberscams linked to cryptocurrency. The blocked URLs were part of a broader directive issued by the Telecommunication Regulator of Cambodia (TRC) on November 20, targeting over 100 sites, mostly connected to online gambling, Nikkei Asia reported on Tuesday.
The blockage of exchanges may be seen as symbolic, aimed at signaling commitment to combating illicit activity rather than a substantive step toward regulatory clarity. Apps for the blocked platforms remain operational, reflecting the practical difficulties of restricting access to global digital assets, Nikkei noted. This duality leaves Cambodia in a precarious position: attempting to assert regulatory control while inadvertently driving crypto activity deeper into the shadows.
Cambodia’s crypto landscape is paradoxical. On one hand, it is embracing financial innovation with the Bakong digital payments system, which saw 200 million transactions in 2023. On the other, cryptocurrency remains officially prohibited, yet it thrives unofficially through peer-to-peer markets and platforms like Huione Guarantee. The latter plays a pivotal role in facilitating billions in transactions, often linked to online gambling and cyberscams, and has facilitated over $49 billion in crypto transactions from 2021 to mid-2024, accounting for a significant portion of the country’s crypto activity.
This uneasy coexistence reflects broader concerns. A 2024 report by the United Nations Office of Drugs and Crime highlighted the use of cryptocurrency in Cambodia for laundering money from activities such as online gambling and fraud. The Financial Action Task Force (FATF) has warned Cambodia about its lack of anti-money laundering protections, adding urgency to its regulatory efforts.
Binance’s inclusion in the blocklist adds intrigue, given its 2022 partnership with Cambodian authorities to develop crypto regulations. The company’s training of local officials in crypto crime detection earlier this year underscores the potential for public-private collaboration. Blocking Binance and similar platforms could deter legitimate players from participating in Cambodia’s crypto future, isolating the country further from global markets.
Comprehensive licensing frameworks, rather than outright bans, are better suited to addressing illicit activity while fostering innovation. Cambodia’s piecemeal approach—limited sandbox experiments and selective enforcement—risks alienating credible industry players while failing to stem criminal activity.
The crackdown may also hinder Cambodia’s potential to position itself as a regional fintech leader. With retail crypto adoption ranking among the top globally, the demand is undeniable. Balancing security, innovation, and regulatory clarity will determine whether Cambodia can integrate crypto into its economy or remain an outlier struggling against an unstoppable tide.
