Cambodia Restricts Access to Binance and Coinbase to Regulate Market
Cambodia dialed down on access to Binance despite its Collaborative relationship in training Interior Ministry officials on crypto-related crime detection
Cambodia recently blocked crypto access to 16 cryptocurrency exchange websites, including prominent platforms such as Binance and Coinbase, while permitting access to mobile applications.
As Nikkei Asia reported on December 3rd, the action highlights the inherent challenges in managing a decentralized digital asset landscape while simultaneously addressing concerns about illicit activities and protecting consumers.
The Telecommunication Regulator of Cambodia (TRC) implemented the website blockade, citing a lack of necessary licenses from the Securities and Exchange Regulator of Cambodia (SERC).
While 102 domains were blocked in total, primarily targeting online gambling sites, the specific targeting of major cryptocurrency exchange websites indicates a deliberate effort to curtail unregulated digital asset trading within the country. The decision to allow continued access via mobile applications, however, presents a significant loophole, arguably diminishing the effectiveness of the imposed restrictions.
Cambodia Regulatory Restriction on Binance
This regulatory action is particularly noteworthy considering Binance’s existing collaborations within Cambodia. These include a 2022 memorandum of understanding with SERC aimed at developing digital currency regulations and a separate agreement with Royal Group, one of Cambodia’s largest conglomerates.
Furthermore, in June 2023, Binance trained Interior Ministry officials on crypto-related crime detection. Despite these efforts to foster collaboration and contribute to regulatory frameworks, Binance, along with other affected exchanges, is subject to these website restrictions.
A Binance spokesperson, Lily Lee, acknowledged the situation, emphasizing that the company is closely monitoring developments and is not the sole entity affected by the ban.
Currently, only two companies operate under SERC’s “FinTech Regulatory Sandbox” program, granting them licenses to trade digital assets. Crucially, however, these licenses do not extend to exchanging digital assets for fiat currencies, such as the Cambodian riel or US dollars.
Despite the imposed restrictions, Cambodia maintains a prominent position in global cryptocurrency adoption. Chainalysis, a leading analytics firm, ranks Cambodia among the top 20 countries worldwide in terms of retail crypto use per capita.
Centralized Exchanges Rack up 70% Crypto Transactions
Centralized exchanges account for a substantial 70% of crypto transactions within the country. This high level of adoption, juxtaposed with the government’s regulatory efforts, indicates a clear disconnect between regulatory intention and practical market realities.
As Chengyi Ong, Chainalysis’s head of Asia-Pacific policy, notes, widespread restrictions are often ineffective in the face of substantial organic demand and real-world cryptocurrency applications.
Cambodia’s vulnerability to cryptocurrency-related criminal activities further complicates the regulatory landscape. The UN Office on Drugs and Crime has documented the use of cryptocurrency by criminal organizations in Cambodia for dark web payments and money laundering activities.
Chainalysis’s data reveals over $49 billion in crypto transactions between 2021 and mid-2024 facilitated by Huione Guarantee, a crypto-led marketplace associated with the Cambodian conglomerate Huione Group.
