Cambodia Blocks Binance, Coinbase, and 14 Other Crypto Exchanges Amid Rising Concerns

Cambodia has blocked access to 16 crypto exchange websites, including major platforms like Binance, Coinbase, and OKX, as part of its effort to regulate the digital asset market.

The action, enforced by the Telecommunication Regulator of Cambodia (TRC), targets platforms operating without proper licenses from the Securities and Exchange Regulator of Cambodia (SERC).

Cambodia vs. Crypto: New Rules Aim to Curb Illicit Activities

It was reported that authorities restricted access to 102 domains in a directive signed by TRC acting chairman Srun Kimsann, focusing primarily on cryptocurrency exchanges and online gambling sites. Authorities have blocked website access, but mobile apps for these platforms remain functional.

The crackdown reflects Cambodia’s cautious approach to cryptocurrency. Only two entities are currently authorized to operate under the SERC’s FinTech Regulatory Sandbox program. Regulators prohibit these licensed platforms from facilitating the exchange of digital assets for fiat currencies, including the Cambodian riel and US dollars.

This move comes despite Binance’s partnerships in Cambodia. In 2022, Binance signed a memorandum of understanding with SERC to assist in developing digital currency regulations. Binance has also collaborated with the Royal Group, a leading Cambodian conglomerate, and trained Interior Ministry officials to detect crypto-related crimes earlier this year.

Crypto Paradox in Cambodia

Cambodia’s regulatory measures come amid increasing scrutiny over its role as a hub for crypto scams and cybercrime. The UN Office on Drugs & Crime has flagged the country as a hotspot for illicit activities, including money laundering and dark web transactions facilitated through cryptocurrencies.

Criminal syndicates tied to Chinese gambling and fraud networks have trafficked around 30,000 individuals to Cambodia and neighboring Myanmar. Criminals coerce these victims into creating fake profiles and orchestrating scams, including fraudulent cryptocurrency schemes, under severe duress.

“Huione Guarantee, an online marketplace tied to the Cambodian conglomerate, Huione Group, has recently been exposed as a significant player in facilitating cybercrimes. Our coverage of the service is much larger than previously reported — we identified that the platform has processed more than $49 billion in cryptocurrency transactions since 2021,” Chainalysis found.

Many of these activities are linked to Sihanoukville, a city notorious for illegal online gambling operations. Cambodia banned such activities in 2020 following pressure from Beijing, but remnants of the underground economy persist.

The Chainalysis report revealed billions in pig butchering operations tied to Huione Guarantee. This finding intensified global concerns about Cambodia’s regulatory and enforcement framework for cryptocurrency activities.

Despite its crackdown on exchanges, Cambodia remains a significant player in the global crypto terrain. Cambodia ranks in the top 20 for retail crypto usage per capita, with 70% of transactions via centralized exchanges. Statista expects the Digital Assets market in Cambodia to generate $8 million in revenue in 2024, though growth may slow by 2025.

Digital Asset Market Growth Cambodia. Source: Statista.

The government has embraced digital financial innovation through the Bakong payments system, which processed 200 million transactions in 2023. Yet, cryptocurrency remains officially prohibited while thriving unofficially through peer-to-peer markets and platforms like Huione Guarantee.

The Cambodia Fintech Development Policy outlines plans for a comprehensive regulatory framework for digital assets and decentralized finance systems. These measures aim to address financial crimes and support a more organized digital economy in the years ahead.

Crypto Crackdowns Elsewhere

Cambodia’s actions are part of a global trend. In September 2024, German authorities shut down 47 crypto exchanges over money laundering allegations. They cited anonymous transactions without proper KYC protocols.

In November 2024, the UK’s Financial Conduct Authority introduced a “roadmap” for stricter crypto regulations. These include capital requirements and insider trading rules, which are expected to be implemented by 2026.

Meanwhile, Coinbase continues to face significant challenges in the US. In June 2023, the SEC charged Coinbase with operating as an unregistered securities exchange, broker, and clearing agency.

Coinbase sought to dismiss the case, but a New York court denied this motion in March 2024. The SEC’s allegations were allowed to proceed. Coinbase’s regulatory battles underscore the broader uncertainties facing crypto exchanges in the US

As countries ramp up enforcement measures, the crypto industry faces a crucial inflection point. Striking a balance between innovation and compliance will determine the trajectory of digital assets in markets like Cambodia, Germany, the UK, and the US. For now, crypto players must navigate an increasingly fragmented and challenging regulatory environment.

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