Follows Central Bank of Iraq warning
Fraud reported in Duhok province
Forex companies also targeted
The semi-autonomous Kurdistan region in northern Iraq has launched a crackdown on cryptocurrency trading, following warnings by the Central Bank of Iraq.
The Kurdistan Regional Government has formed an interior ministry committee to enforce the closure of crypto and foreign exchange companies, it said in a statement at the weekend.
The committee, which can order raids on company premises, was set up after reports of a crypto scam in the Kurdish province of Duhok. Last month the authorities in Duhok arrested two people suspected of running a crypto scheme that defrauded local investors of nearly $15 million.
The Central Bank of Iraq had earlier issued public warnings about “fake electronic stock trading companies claiming to be licensed by the bank”.
The bank “does not grant licenses to companies trading in stocks, metals and cryptocurrencies and takes all legal measures against such suspected companies”, it said.
Iraq imposed a ban on cryptocurrencies in 2017, citing risks around financial crimes and terrorist funding. Crypto trading remains limited in the country even as interest in digital currencies has rocketed and tighter regulation is adopted in other Middle East markets.
The Central Bank of Iraq has warned members of the public not to be taken in by the claims of “fraudulent companies” that “broadcast fake videos and posts and claim profits are withdrawn through wallets or delivered directly to individuals”.
In February, the bank revealed plans to issue its own digital currency to gradually replace local paper currency.
Governor Ali Al Allaq said the currency reflected the “radical” changes in the global financial and banking system.
