The Kurdistan Regional Government’s Ministry of Interior has officially banned cryptocurrency and Forex trading across the Kurdistan Region, warning that authorities will take legal action against violators.
In a statement, the ministry prohibited citizens and businesses from participating in digital currency transactions or electronic financial speculation. Officials said these activities remain illegal because neither the Kurdistan Region nor Iraq has a legal framework to regulate them.
The ministry stated that cryptocurrencies, including stablecoins such as USDT, as well as Forex trading platforms, operate without official licenses or recognized legal status in Iraq. Officials said the decision follows the directives of the Central Bank of Iraq and the KRG Ministry of Finance.
Authorities also announced strict enforcement measures. Security teams will identify and shut down offices or businesses that promote or conduct cryptocurrency and Forex trading under the label of legitimate companies. Officials will refer violators to the judiciary for prosecution.
The ministry urged citizens to avoid digital asset trading to protect their savings from fraud, scams, and extreme market volatility. Officials also advised individuals who lost money through such platforms to pursue legal options to recover their funds.
Authorities said the ban primarily aims to protect consumers and strengthen financial security. The ministry warned that traders remain vulnerable because Iraq lacks oversight mechanisms and investor protections for digital assets.
Iraq has maintained a restrictive stance on cryptocurrencies for years. In December 2017, the Central Bank of Iraq prohibited banks, financial institutions, and currency exchange companies from dealing in cryptocurrencies. The bank warned that violators could face penalties under anti-money laundering and counterterrorism financing laws.
Iraqi banks have since blocked payment cards and digital wallets from being used for cryptocurrency trading or related speculation.
Officials and financial experts argue that cryptocurrencies could increase money laundering, financial fraud, and illegal transactions due to their decentralized structure and privacy features.
Despite the ban on private cryptocurrencies, Iraq continues to explore state-controlled digital finance. The Central Bank of Iraq is currently developing a central bank digital currency known as the digital dinar.
Officials say the digital dinar could modernize Iraq’s payment system, reduce reliance on cash, and improve financial oversight while keeping monetary control under the central bank.
