Crypto have been a source of controversy among individuals and nations ever since the entrance of Bitcoin into the financial market. One reason for this is anonymity, one of the bedrock behind the creation of the assets. The major reason is that illicit actors hide under this guise to carry out their malicious activities. These activities include scamming and hacking, which is centered around stealing funds from clients and traders.
Although exchanges are working overtime to secure their platforms and ward off malicious actors, most countries feel they are not doing enough. This is why several countries have a regulation guiding the crypto sector in their respective countries. For some, it is a rule for crypto exchanges and traders to abide by. For others, it is the total abolishment of the practice across such nations. In this article, we will be looking at crypto trading and five countries where crypto trading is illegal.
What is Crypto Trading?
Crypto trading is an act where traders use either a centralized exchange or a decentralized exchange to predict the price of an asset. Traders purchase these assets with cash and, most of the time, leave them on the exchange where their prices either appreciate or depreciate. Trading crypto is in the same category as trading stocks or other financial products in the market. However, the biggest difference is the volatility in the crypto sector. To carry out crypto trading, a trader needs to set up an account, sign up for a wallet, and fund the wallet. After funding it, he can then proceed to buy any coin of his choice to trade on the exchange.
Top 5 countries where crypto trading is banned
Trading crypto is profitable to individuals as they can earn a massive amount of profit over a short time. However, some governments are still opposed to crypto and what they stand for due to so many ills in the sector. Below are five of the countries that are opposed to crypto:
#1 China
Over the last few years, China has been increasingly putting pressure on the crypto sector in the country with an imminent ban. Before then, the country used to house the highest amount of Bitcoin miners. The country was the go-to site for Bitcoin miners during that period, contributing a remarkable amount to the global Bitcoin hashrate. However, of late, the country has touched every reason why it banned digital assets.
According to a statement from China, crypto was banned in the country because of the spike in energy prices. Another reason for the ban was the massive amount of energy that is always consumed with every crypto transaction. Presently, China has continued to clamp down on crypto traders with its regulation forcing crypto exchanges to leave the country and look for an area of operation outside it.
To eliminate the need for cryptocurrencies, China announced the pilot test of its digital currency. Although the CBDC does not have a confirmed launch date, there have been efforts to succeed through the various tests it is currently undergoing.
#2 Russia
Russia is another country having an issue with digital assets and what they stand for in the financial market. Traders in the country cannot trade digital assets because of an existing ban against trading and investing in the assets. Russia went a step further by blocking all accessible markets where its citizens can trade digital assets. Also, holders of digital assets are outrightly banned from using them as a means of payment for goods and services. Although the country might now be following a regulation path, the assets are still banned.
#3 India
India has always held its position that trading and investing in digital assets are not allowed across the country. Before now, there was no regulation in place to enforce the crypto ban, so a few exchanges were springing up and offering services. However, as far back as 2018, the Reserve Bank of India announced a ban on crypto-related activities.
To this effect, financial institutions across the country were prohibited from helping crypto exchanges in the country facilitate payments. The RBI also ordered banks to close up accounts that belonged to entities trading crypto. Although there has been an overturn on the rule, trading crypto is still not something traders can do openly in the country.
On November 23, there was another update where the government submitted a proposal to the parliament. The proposal contained a bill that would see the creation of a Cental bank-backed digital asset, an act that could signal the end for most digital assets. At the beginning of the year, there were moves to criminalize crypto. The report stated that anybody found holding or trading crypto could end up in jail.
#4 Turkey
Before the start of this year, trading crypto in Turkey was an act that went on without the disturbance of the government. But as the country’s legal tender, Lira started to decline in value, most of its citizens turned to digital assets. The main reason was to cushion the effect and navigate out of the inflation that the decline brought. With this, Turkey became one of the top countries tradings and using crypto.
In April, the central bank of Turkey issued a release where it banned all digital assets. The main reason for the action was the many uncontrollable risks that traders are open to while trading the assets. With that, citizens can no longer hold, trade, or invest in any digital assets. In the same week, the president of Turkey, Tayyip Erdogan, announced that crypto exchanges must abide by its terrorism financing and anti-money laundering rules.
#5 Nigeria
Nigeria used to be one of the most active countries globally when it comes to crypto trading since 2017. In February, the central bank of Nigeria announced that financial institutions would no longer provide banking services to crypto exchanges. This signaled the ban on trading crypto across the country. Before now, Nigeria had cemented its place on top of the pile in terms of crypto activities across Africa. With the ban in place, several banks have been moving to close down accounts belonging to crypto exchanges and traders in the country. A recent report mentioned how FCMB, a commercial bank in the country, closed down accounts of two customers for taking payments from selling crypto.
Conclusion
Digital assets as a means of investment are one of the best tools to make profits. Not only do they satisfy the investment aspect, but traders can also use them for other services. Whether countries like it or not, crypto is to stay, and the earlier they choose to accept, adopt and regulate it, the better for them. Although most concerns about the assets are valid, there is nothing regulation cannot fix, as seen in the case of other prominent countries embracing crypto.
