Cambodia Bans 16 Major Cryptocurrency Exchanges, Including Binance, OKX, and Coinbase, in a Push to Combat Crypto Crimes

In a major regulatory move, Cambodia has banned access to 16 prominent cryptocurrency exchanges, including global giants such as Binance, OKX, and Coinbase, as part of its efforts to curb illegal activities associated with digital assets. This action, announced on November 20, is seen as a significant step toward tightening the country’s control over its burgeoning cryptocurrency market, which has grown rapidly in recent years.

Details of the Ban and Affected Exchanges

The Cambodian government's Telecommunications Regulator has blocked access to 102 web domains associated with these cryptocurrency exchanges. Most of these sites have been linked to online gambling activities that are often facilitated through crypto transactions, raising concerns about the unregulated flow of digital currencies in the country. The ban specifically targets exchanges that have failed to secure the necessary operating licenses from Cambodia’s Securities and Exchange Regulator (SERC).

Despite the ban on websites, mobile applications for these exchanges remain accessible. This indicates that the government’s efforts are mainly focused on limiting online access to crypto trading platforms while still allowing users to trade via apps. However, the long-term effects of this action remain to be seen, as it might lead to reduced trading volumes in the country.

Why This Ban Was Imposed

The Cambodian government’s decision to block these exchanges comes as part of a broader strategy to regulate the rapidly growing digital asset market in the country. With an expected $8 million in digital asset revenue projected for 2024, Cambodia’s crypto market has become an attractive target for both legitimate businesses and criminal organizations. As the market grows, so does the associated risk of fraud, money laundering, and other illicit activities.

According to Statista, Cambodia’s digital asset market is set to reach $8,031,000 in revenue in the coming year, although the growth rate is expected to slow down after 2024. The government’s aim is to protect the growing digital economy from exploitation by bad actors while ensuring that legitimate businesses can operate in a well-regulated environment.

Regulatory Background: Strained Relationships with Major Exchanges

While this ban may seem like a drastic step, it’s important to understand the context in which it was imposed. Binance, one of the largest cryptocurrency exchanges globally, has had an ongoing relationship with Cambodia’s regulatory authorities. In 2022, Binance signed a memorandum of understanding with Cambodia’s Securities and Exchange Regulator (SERC), aimed at creating a regulatory framework for digital currencies in the country.

In addition, Binance partnered with the Royal Group, a major conglomerate in Cambodia, to promote blockchain technology and facilitate the adoption of digital currencies. Binance has also trained officials from Cambodia’s Interior Ministry on identifying and combating crypto-related crimes. Despite these efforts, Binance, along with other exchanges such as OKX and Coinbase, has been blacklisted due to its inability to secure the proper operating licenses from SERC.

In response to the ban, a spokesperson for Binance, Lily Lee, stated: “We are closely monitoring the evolving situation.” However, for the time being, Binance and other unlicensed exchanges remain restricted in Cambodia.

The Role of SERC and Licensing Requirements

Under Cambodian law, exchanges wishing to operate within the country must secure a license through the FinTech Regulatory Sandbox managed by the Non-bank Financial Services Authority (NBFSA). At present, only two companies have obtained licenses to trade digital assets in Cambodia, but these companies are not allowed to facilitate exchanges of digital assets for Cambodian Riel (KHR) or U.S. dollars. This limitation means that while digital assets can be traded within the country, their use in everyday transactions remains largely ineffective, hindering broader adoption.

The fact that Binance, OKX, and Coinbase have failed to meet these regulatory requirements has placed them in direct conflict with Cambodia’s regulatory agenda. The Cambodian government has been adamant about enforcing the need for proper licensing to ensure that digital asset activities are conducted within a framework that promotes financial stability and prevents misuse.

The Growing Concern Over Crypto Crimes in Cambodia

The rise of cryptocurrency-related crimes in Cambodia has been a significant concern for both local authorities and international watchdogs. According to a report from the United Nations Office on Drugs and Crime (UNODC), criminal groups in Cambodia have increasingly turned to cryptocurrencies as a means of laundering money and engaging in illicit activities on the dark web.

One such platform, Huione Guarantee, has been identified as a crypto-led operation linked to cybercriminals in Southeast Asia, including Cambodia. Chainalysis, a blockchain analytics firm, has also linked the platform to Cambodia’s Huione Group, suggesting a growing trend of crypto misuse in the region.

Future Outlook for Digital Assets in Cambodia

The Cambodian government is keen on developing a more organized and regulated digital assets sector. The Cambodia Fintech Development Policy, which was introduced as part of the government's broader strategy, emphasizes the need to create a comprehensive regulatory framework for digital assets and decentralized finance systems.

The goal is to protect the public from financial crimes, while also supporting the growth of a legitimate and sustainable crypto market. As Cambodia continues to fine-tune its regulations, the landscape for digital assets is expected to become more structured, potentially paving the way for greater investor confidence and more significant institutional involvement in the years to come.

Conclusion: A Shift Towards Tightened Regulation

Cambodia’s decision to block major exchanges like Binance, OKX, and Coinbase signals the government’s growing commitment to controlling the country’s cryptocurrency market and reducing the risks associated with illegal crypto activities. With crypto-related scams on the rise and the market continuing to expand, Cambodia is taking proactive steps to safeguard its economy.

For now, the country’s digital asset market remains at a crossroads, with authorities working to strike a balance between fostering innovation and preventing exploitation. The coming months will be crucial in determining how Cambodia’s crypto landscape evolves as regulators continue to refine their approach to managing the industry.