A statement released on Sunday by the ‘standing committee for awareness on dealing in unauthorized securities activities in the foreign exchange market’, warned against trading cryptocurrencies within the Saudi Arabian Kingdom.
The committee in the statement said that the digital assets were illegal within the Kingdom citing their negative consequences, lack of government supervision and high volatility as the reason for their ban. Although the statement made it clear that virtual currencies were henceforth illegal in the Kingdom, it did not explain what actions would be taken against anyone found trading them.
Saudi Arabia Is Against Everything That Cryptos Stand For
Last year Saudi Prince Al-Waleed heavily criticized bitcoin even though it was enjoying its all-time price rally hitting as high as $20,000. In an interview with CNBC, the prince made his thought known claiming that;
“I think it’s just going to implode one day. It’s Enron in the making.”
The prince compared bitcoin to an American energy company, Enron, which after enjoying highs of $90.75 in its share price made a dramatic fall that saw prices go to $0.26 before the company finally declared itself bankrupt. The company that was believed to be the ‘the most innovative company’ in America made a fall that cost investors millions and in the words of Investopedia “shook Wall Street to its core.” The company that was founded in 1985 made a controversial and dramatic fall that few could have predicted and although the fall came in the early 2000, has remained a great example as financial scam.
So, it comes as no surprise that a committee formed by the supreme decree would announce that cryptocurrencies are illegal in the Kingdom. The committee was made up of different government agencies including; Capital Market Authority (CMA), Ministry of Ministry of Interior membership, Ministry of Media, Ministry of Commerce and Investment and Saudi Arabian Monetary Authority. In the statement the committee warned citizens against what it termed as a “get-rich scheme” or as we call them cryptocurrencies;
“The committee assured that virtual currency including, for example but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices.”
Given the price of bitcoin right now -which is around $6,400- it’s hard to judge the committee and the prince for criticizing the digital asset. Its volatility remains a major concern as it has shed over $13,000 from its all-time high price and investors who bought it at the time have no reason not to compare it to the Enron scandal. Furthermore, many other investors have lost their bitcoin investment to hacks which have also been a major problem in the crypto space, rocking the crypto boat in the last couple of years.
Some experts believe that most of these problems could be solved through government regulations but it seems that even more experts disagree with this thought and believe that it is just not in a cryptocurrency’s nature to be regulated or governed. The fundamental reason and point of having cryptocurrencies is to have an asset that is not governed or controlled by a central power which is why many governments remain opposed to them.