Libya Compliance Report

Generated 2026-09-22

Comprehensive Framework

Regulatory Overview

Regulatory Status: Dedicated crypto/VA legislation, licensing regime, active enforcement
Key Regulator(s): Central Bank of Libya, Ministry of Justice
Primary Legislation: Amending and replacing earlier laws like Law No. 2 of 2005, s financial regulatory landscape includes the law of the State
Travel Rule: Not adopted
Tax Reporting: No Specific Rates for Crypto: Since cryptocurrency is banned, there are no specific capital gains tax rates applicable to virtual assets in Libya.. General Capital Gains: Libya generally does not have a broad capital gains tax regime for individuals on financial assets. Corporate profits are subject to corporate income tax, which may implicitly include capital gains from business assets. However, this does not extend to illegal individual crypto activities.. No Specific Income Tax for Crypto: There is no specific income tax legislation or guidance that addresses income derived from cryptocurrency activities.. General Income Tax Principles: In theory, if an individual were to illegally generate income from cryptocurrency trading or mining, and this income were somehow discovered and proven, it could potentially be subject to general income tax laws. However, the primary legal issue would be the illegality of the activity itself, rather than its taxation.. No Specific VAT/GST for Crypto: Libya does not have a comprehensive Value Added Tax (VAT) or Goods and Services Tax (GST) system in the modern sense. It operates more on customs duties and specific excise taxes. Therefore, there is no VAT/GST treatment or guidance for cryptocurrency transactions.

Key Facts

aml No Equivalent Test: Libya does not have a specific legal test akin to the Howey test for determining whether a digital asset constitutes a "security." The regulatory focus is not on differentiating token types (utility vs. security), but on the inherent risks associated with all cryptocurrencies themselves. Basis for Restriction: The CBL's pronouncements are based on concerns about: Absence of regulatory oversight and legal framework. High volatility and speculative nature. Potential for fraud and consumer protection issues. Facilitation of money laundering and terrorism financing due to perceived anonymity and cross-border nature. Threats to financial stability and monetary sovereignty. All cryptocurrencies are treated with suspicion: Given the overarching restrictive stance, the concept of differentiating between utility tokens, security tokens, or other categories as distinct "securities" does not apply in Libya's current regulatory framework.
enforcement Limited Transparency: Enforcement actions, especially in financial crime or emerging tech, might not be widely publicized or documented in English-language media. Focus on Other Crimes: Law enforcement may prioritize other forms of financial crime or security threats. Technical Capacity: Regulators and law enforcement might lack the specialized technical capacity to track, investigate, and prosecute complex cryptocurrency-related offenses effectively. Regulator Name: Central Bank of Libya (CBL) Entity Targeted: All individuals and financial institutions within Libya (general ban, not a specific entity). Violation Type: Dealing in, trading, or possessing cryptocurrencies. Penalty Amount: Not applicable to the ban itself, but potential penalties under Libyan law for illegal financial activities could include fines and imprisonment. Date: The initial ban was issued in 2018, and it has been reaffirmed multiple times since. There is no indication it has been lifted in the last three years. Outcome: Cryptocurrencies remain illegal in Libya. Middle East Monitor - Libya's Central Bank bans dealing in cryptocurrency (Dated 2018, but establishes the foundational ban which remains active.)
licensing Law No. 1 of 2021 on Anti-Money Laundering and Combating the Financing of Terrorism (Amending and replacing earlier laws like Law No. 2 of 2005). This law establishes the general framework for combating money laundering and terrorist financing, defining predicate offenses, specifying obligations for financial institutions and designated non-financial businesses and professions (DNFBPs), and outlining penalties. While it does not specifically mention "virtual assets" or "VASPs," its general provisions on financial transactions and illicit funds would apply to any entity processing value. For Individuals: Obtaining and verifying name, permanent address, date of birth, nationality, and official identification documents (e.g., national ID, passport). For Legal Entities/Arrangements: Obtaining and verifying name, legal form, proof of existence, powers that regulate and bind the entity, and the names of relevant persons having a senior management position. Beneficial Ownership: Identifying and verifying the ultimate beneficial owner (UBO) of customers who are legal entities or arrangements, typically individuals who own or control 25% or more of the entity's shares or voting rights, or otherwise exercise control through other means. Purpose and Nature of Business Relationship: Understanding the purpose and intended nature of the business relationship or occasional transaction. Ongoing Monitoring: Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship, to ensure that the transactions are consistent with the obliged entity’s knowledge of the customer, their business, and risk profile. Risk-Based Approach: Applying CDD measures based on a risk assessment of the customer, business relationship, or transaction. Enhanced Due Diligence (EDD) would be required for higher-risk situations, such as:
marketing Central Bank of Libya (CBL): Responsible for monetary policy, financial stability, and the regulation of banks and other financial institutions. Website: https://www.cbl.gov.ly/ Ministry of Finance: Oversees fiscal policy, taxation, and government revenue management. No specific Libyan legislation directly governs cryptocurrencies or digital assets. Existing financial regulations indirectly touch upon digital transactions but do not single out crypto activities. Libya is a member of the Financial Action Task Force (FATF), which sets global standards for combating money laundering and terrorist financing. However, there are no dedicated FATF recommendations targeting cryptocurrencies within Libyan law as of 2025–2026. No specific license is required by Libyan authorities to engage in cryptocurrency or digital asset marketing activities. N/A (no licensing framework established). Not applicable due to the absence of regulatory mandates. None. The lack of a formal licensing process means no entities have been officially recognized for crypto-related operations in Libya.
ongoing Central Bank of Libya (CBL) – Responsible for monetary policy and financial stability; website: https://www.cbl.gov.ly Ministry of Finance – Oversees fiscal policies. FATF (Financial Action Task Force) – International body providing recommendations on combating money laundering and terrorist financing. No specific Libyan legislation directly addresses virtual assets or cryptocurrencies. Existing financial regulations primarily target fiat currency transactions. FATF Virtual Assets Recommendations (2023) are referenced but not legally binding in Libya; URL: https://www.fatf-gafi.org/media/fatf/documents/recommendations/Virtual-Accounts-and-Virtual-Funds-Recommendations.pdf Libya is listed by the FATF as a "jurisdiction under monitoring," indicating concerns over insufficient AML/CFT measures for virtual assets. URL: https://www.fatf-gafi.org/media/fatf/documents/recommendations/Virtual-Accounts-and-Virtual-Funds-Recommendations.pdf No formal requirement for crypto exchanges, wallet providers, or Initial Coin Offerings (ICOs) to obtain a license from the CBL or any Libyan authority. None explicitly defined for virtual assets. Traditional financial services (e.g., payment institutions) must comply with existing licensing under Libyan law but not specifically for crypto activities.
sanctions UNSCR 1970 (2011): Imposed an arms embargo, travel ban, and asset freeze on specific individuals and entities. UNSCR 1973 (2011): Expanded the asset freeze and travel ban. UNSCR 2009 (2011), 2174 (2014), 2213 (2015), 2278 (2016), 2362 (2017), 2652 (2022): Extended and modified the sanctions regime, including measures related to illicit oil exports, human trafficking, and human rights abuses. Crypto Relevance: The "asset freeze" provisions in these resolutions cover all funds, other financial assets, and economic resources, which are interpreted to include virtual assets like cryptocurrencies. Any individual or entity designated under the UN Libya sanctions is prohibited from accessing or transacting with their assets, including crypto. Sanctioned Entity Screening: VASPs must screen all their customers (KYC) and transaction counterparties against the UNSC Consolidated List related to Libya. UNSC Consolidated List: https://www.un.org/securitycouncil/sanctions/1970/materials Asset Freezing: If a VASP identifies a match, it must immediately freeze any crypto assets belonging to or controlled by the designated person/entity and report it to the relevant national authorities. Prohibition on Funds/Economic Resources: VASPs are prohibited from making crypto assets or economic resources available, directly or indirectly, to or for the benefit of listed individuals/entities.
securities The Libyan regulatory environment for cryptocurrencies and digital asset securities remains underdeveloped, with limited specific legislation targeting these financial instruments. Libya's financial sector is subject to sanctions regulations imposed by the United Nations Security Council and the U.S. Office of Foreign Assets Control (OFAC), which indirectly affect digital asset activities. Currently, there are no explicit licensing requirements for cryptocurrency exchanges or digital asset securities offerings in Libya. Any operation would fall under the purview of existing financial sector regulations without dedicated crypto-specific provisions. Existing anti-money laundering (AML) and know-your-customer (KYC) frameworks in Libya, primarily targeting traditional banking and financial institutions, may be applied to digital asset service providers. However, the enforcement of these requirements on crypto-related entities is inconsistent. Recent enforcement actions by Libyan regulatory bodies have focused on traditional financial crimes rather than specific cryptocurrency or digital asset securities violations. The absence of targeted regulations means that enforcement is discretionary and often reactive. The Libyan government has not issued clear guidelines on the taxation of cryptocurrency transactions or digital asset securities. As a result, tax treatment remains ambiguous, potentially exposing market participants to uncertain fiscal liabilities. Regulatory Uncertainty: The lack of specific crypto regulations creates uncertainty for market participants. Enforcement Discretion: Without clear licensing and compliance mandates, enforcement actions are sporadic.
stablecoin Central Bank of Libya (CBL) – responsible for monetary policy and oversight of traditional banking activities. Website: https://www.cbl.gov.ly No specific legislation directly governs stablecoins or digital assets. Existing financial regulations pertain to conventional banking and payment systems, with no explicit reference to cryptocurrencies or stablecoin operations. Official Gazette entries regarding stablecoins are absent. Libya is not a member of the Financial Action Task Force (FATF) or Moneyval, indicating limited international regulatory alignment concerning AML/CFT standards for digital assets. No legal requirement exists for entities to obtain a license to issue or operate stablecoins in Libya. Undefined; no reserve or capital obligations are stipulated by law for stablecoin issuers. Nonexistent due to the lack of regulatory provisions. No mandated structural or operational criteria, such as oversight by a financial regulator, are in place. None; there have been no reported instances of stablecoin licensing within Libya.
status Libya has no dedicated legal framework specifically governing cryptocurrency or virtual assets; no law, regulation, or official gazette publication establishing a licensing regime for crypto businesses was identified in available official sources. Departments & Offices – Ministry of Finance No license types, capital requirements, or application procedures for cryptocurrency businesses exist in any official source; no entity has been licensed to conduct virtual asset activity. The Central Bank of Libya announces the receipt of March salaries and the commencement of their disbursement through the “Your Salary Instantly” project. The practical reality is that crypto businesses operate in a legal vacuum with no explicit prohibition, no authorization pathway, and significant risk of enforcement action under general financial laws due to the CBL's mandate over financial stability. Governor of the Central Bank of Libya, and Emad Trabelsi discuss shared economic and security files The CBL and Ministry of Interior have established a joint task force targeting unlicensed financial operators, signaling that unregulated digital asset businesses could face scrutiny under existing financial regulatory enforcement frameworks. Governor of the Central Bank of Libya, and Emad Trabelsi discuss shared economic and security files The Ministry of Finance (mof.gov.ly) oversees fiscal policy, public revenues, treasury management, and budget execution through its various departments including the Financial Revenues Department, Budget Department, Treasury Management Department, and Follow-up Department. Departments & Offices – Ministry of Finance The Ministry of Finance's Treasury Management Department maintains records of payments made in foreign currencies and participates in committees concerning financial compliance and account closures. Departments & Offices – Ministry of Finance The Accounts Department within the Ministry of Finance coordinates with competent authorities regarding permission for public authorities to open bank accounts and supervises them according to current legislation, alerting of any violations. Departments & Offices – Ministry of Finance The Ministry of Finance is headed by Rashid Abu Ghuffa as Minister, who also serves as Chairman of the General Assembly of the Sahel and Sahara Investment and Trade Bank, and he has engaged in meetings with senior US officials regarding bilateral cooperation. Libyan News Agency - Home Page
tax No Specific Rates for Crypto: Since cryptocurrency is banned, there are no specific capital gains tax rates applicable to virtual assets in Libya. General Capital Gains: Libya generally does not have a broad capital gains tax regime for individuals on financial assets. Corporate profits are subject to corporate income tax, which may implicitly include capital gains from business assets. However, this does not extend to illegal individual crypto activities. No Specific Income Tax for Crypto: There is no specific income tax legislation or guidance that addresses income derived from cryptocurrency activities. General Income Tax Principles: In theory, if an individual were to illegally generate income from cryptocurrency trading or mining, and this income were somehow discovered and proven, it could potentially be subject to general income tax laws. However, the primary legal issue would be the illegality of the activity itself, rather than its taxation. No Specific VAT/GST for Crypto: Libya does not have a comprehensive Value Added Tax (VAT) or Goods and Services Tax (GST) system in the modern sense. It operates more on customs duties and specific excise taxes. Therefore, there is no VAT/GST treatment or guidance for cryptocurrency transactions. None (Due to Ban): Because cryptocurrency activities are banned, there are no official reporting requirements for individuals or businesses related to holding, trading, or earning from virtual assets to the Libyan tax authorities. Illegality: Any such activities would necessarily be conducted outside the formal financial system and would not be reported. None: Libya does not have any crypto-specific tax legislation. The existing legal framework treats cryptocurrency as an unauthorized and prohibited financial instrument.
travel rule Libya does not have a specific cryptocurrency or digital asset legal framework, including travel-rule regulations, as of 2025–2026. Libya International Travel Information There is no designated regulatory authority for virtual assets, no licensing regime, and no registration obligations for crypto businesses in Libya. Libya Travel Advisory | Travel.State.gov The United States has imposed flight prohibitions over Libya due to the unstable political and security environment, which directly impacts any potential digital asset business operations requiring physical presence or air travel. Federal Register :: Extension of the Prohibition Against Certain Flights in the Territory and Airspace of Libya Libya is not compliant with FATF standards regarding virtual assets, and no travel-rule implementation exists for cryptocurrency transactions. Travel Advisory Libya July 16, 2025 - U.S. Embassy Libya Practical reality: No crypto businesses can currently operate legally or obtain any form of license in Libya due to the complete absence of a legal framework and the ongoing security crisis. State The Libyan Financial Information Unit (FIU) exists as the country's financial intelligence unit, yet it has published no rules for cryptocurrency transaction monitoring or travel-rule compliance. Libya Travel Advisory | Travel.State.gov Libya has not enacted any primary legislation (law, decree, or regulation) specifically addressing virtual assets, digital currencies, or blockchain technology as of the 2025–2026 period. Federal Register :: Extension of the Prohibition Against Certain Flights in the Territory and Airspace of Libya The country remains under significant international sanctions and security restrictions, including U.S. Federal Aviation Administration (FAA) Special Federal Aviation Regulation (SFAR) No. 112, which prohibits U.S. carriers and operators from flying in Libyan airspace through March 20, 2028. Federal Register :: Extension of the Prohibition Against Certain Flights in the Territory and Airspace of Libya

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-22. View full profile