Sudan’s Cryptocurrency Regulations: A Legal Vacuum for Financial Crime

Background

Sudan is one of the few countries in the world without specific regulations governing cryptocurrency. Despite its potential to revolutionize financial transactions, the country’s current electronic payment laws do not cover digital currencies such as Bitcoin and Ethereum.

The Current State of Affairs

• Sudan’s Electronic Transactions Act of 2007 was enacted before the rise of cryptocurrencies and does not provide clear guidelines for their use.
• While the law protects the secrecy of information and outlines the process of electronic contracting, it falls short in addressing the unique challenges posed by digital currencies.

Positive Developments

However, there are signs that Sudan is moving towards a more modern payment system. In June 2020, the country joined the Better Than Cash Alliance, a global initiative aimed at reducing the use of cash and increasing transparency in government services. This shift towards digital payments could pave the way for the adoption of cryptocurrency at the state level.

Risks and Challenges

Despite these positive developments, Sudan’s cryptocurrency landscape remains fraught with risk. According to Cointobuy’s analysis, the country has a safety rank of just 0.2 out of 10, largely due to:

• The fact that 77 initial coin offerings (ICOs) have banned Sudanese citizens from participating in their crowdfunding ventures.
• Regulatory uncertainty and lack of clear guidelines for cryptocurrency use.

Importance of Regulation

Regulating cryptocurrencies in Sudan would not only provide greater security for all stakeholders but also protect the country from harmful use and illegal activities. The lack of clear regulations leaves the door open for financial crime, including:

• Money laundering
• Terrorist financing

Global Perspective

Meanwhile, experts warn that the legal status of cryptocurrency mining remains unclear in most jurisdictions around the world. In some countries, such as Israel and Canada, crypto mining is subject to specific laws and regulations, while in others, regulatory uncertainty persists.

Conclusion

As Sudan continues to navigate its relationship with cryptocurrency, it would be wise for the government to take steps towards establishing a clear legal framework that balances the potential benefits of digital currencies with the need to prevent financial crime.