RESEARCH: Madagascar cryptocurrency and digital asset sanctions regulatory requirements

RESEARCH: Madagascar Cryptocurrency and Digital Asset Sanctions Regulatory Requirements

Executive Summary

Crypto activities in Madagascar are subject to compliance with United Nations (UN) sanctions. The country does not maintain an autonomous sanctions list and adheres strictly to UN-imposed restrictions. No specific licensing framework for cryptocurrency or digital asset services exists, nor have any entities been licensed for such purposes as of 2025–2026. The practical reality is that individuals and businesses must navigate UN sanctions compliance, with no local regulatory body providing guidance beyond general AML/KYC obligations. Enforcement primarily rests on international bodies imposing penalties for violations. Tax treatment for crypto gains remains undefined within Madagascar’s tax framework.

Regulatory Framework

Regulatory Bodies:

• African Union Peace and Security Council (AU PSC): Responsible for coordinating sanctions against Madagascar's leadership post-coup.
  • Website: AU PSC

Primary Laws:

• United Nations Security Council Resolutions: Imposes economic and trade sanctions on Madagascar in response to political instability.
  • Status: Active

International Standing:

• FATF Membership: Madagascar is not listed on the FATF List of Countries with strategic AML deficiencies and was deemed Compliant for 9 and Largely Compliant for 14 of the FATF 40 Recommendations in its latest follow-up Mutual Evaluation Report (2024).
  • Source: KnowYourCountry

Licensing Requirements

• Who Needs a License: No specific licensing requirement exists for cryptocurrency or digital asset service providers in Madagascar.
• Activities Requiring Licensing: None identified specifically for crypto-related activities.
• Capital Requirements: Not applicable due to the absence of relevant licensing frameworks.
• Application Process & Timeline: N/A – no local regulatory body oversees crypto licensing.
• Structural Requirements: No defined structural prerequisites for crypto businesses.
• Entities Licensed: As of 2025–2026, no entities have been licensed for cryptocurrency or digital asset services in Madagascar.

AML/KYC Requirements

• CDD (Customer Due Diligence): General compliance expected under international sanctions; specific crypto AML guidelines absent.
• EDD (Enhanced Due Diligence): Required for high-risk customers, including those involved in sanctioned entities or politically exposed persons (PEPs).
• STR Reporting: Not specifically mandated for crypto but applicable to suspicious transactions flagged by UN sanctions compliance checks.
• Record Retention: Standard AML obligations require retaining transaction records for at least five years.
• Beneficial Ownership & PEP Screening: Mandatory under broader financial regulations; no crypto-specific exemptions.

Enforcement Actions

• Penalties: Violations of UN sanctions can result in asset freezes, trade embargoes, and diplomatic isolation imposed by the AU PSC and international bodies.
• Cases: The AU PSC sanctioned President Andry Rajoelina and 108 officials for refusing mediation efforts, leading to diplomatic isolation until a return to power-sharing talks (source: VOA).

Tax Treatment

No specific tax guidance exists for virtual assets in Madagascar. Crypto gains are currently untaxed under the national tax regime.

Key Gaps & Risks

• Regulatory Gaps: Absence of a dedicated crypto regulatory framework leaves businesses to self-comply with broad AML/KYC standards and UN sanctions.
• Implementation Risks: High reliance on international bodies for sanction compliance may result in delayed enforcement actions and unclear guidance for local entities.
• Practical Reality vs. Paper Law: While paper law mandates adherence to UN sanctions, the lack of local oversight poses challenges in ensuring consistent compliance.

Sources

• African Union considers Madagascar sanctions... | ReliefWeb
• Guide to Madagascar's Sanctions List — Castellum.AI
• Madagascar: Sanctions Result in Economic Decline and Food...
• African Union Sanctions Madagascar's Leaders
• Madagascar – KnowYourCountry

Claims

• Madagascar does not maintain an autonomous sanctions list, adhering instead to UN sanctions. Guide to Madagascar's Sanctions List — Castellum.AI
• The AU Peace and Security Council imposed sanctions on President Andry Rajoelina and 108 officials, mandating diplomatic isolation until returning to power-sharing talks. African Union Sanctions Madagascar's Leaders
• No specific licensing framework exists for cryptocurrency or digital asset services in Madagascar, with no entities licensed as of 2025–2026. Guide to Madagascar's Sanctions List — Castellum.AI
• FATF assessed Madagascar as compliant for 9 and largely compliant for 14 of its recommendations in the latest mutual evaluation (2024). Madagascar – KnowYourCountry
• No tax guidance exists specifically for virtual assets, leaving crypto gains untaxed under Madagascar's current tax regime. Madagascar – KnowYourCountry