Iraq

Cryptocurrency activities in Iraq are officially banned, establishing a prohibitive landscape for financial institutions and a legally ambiguous environment for individual investors. The Central Bank of Iraq (CBI) has issued strict directives explicitly prohibiting banks and all financial entities from dealing in cryptocurrencies, primarily under the framework of anti-money laundering and counter-terrorist financing laws. While this prohibition is clear for institutions, individual possession and peer-to-peer trading of cryptocurrencies exist in a legal gray area, as no specific law directly criminalizes these actions for individuals, though risks under broader AML frameworks persist. The Central Bank of Iraq (CBI) stands as the primary regulatory authority overseeing financial activities and enforcing the cryptocurrency ban. Its legal foundation for this prohibition includes directives like Circular No. (125/5/9) from November 2021, alongside the overarching Anti-Money Laundering and Counter-Terrorist Financing Law No. 39 of 2015. Given the explicit ban on cryptocurrency activities, Iraq lacks any formal taxation framework specifically designed for crypto. Consequently, there are no defined individual income tax rules, capital gains tax provisions, or corporate tax rates applicable to crypto transactions, all such activities are deemed prohibited. Converting cryptocurrency to fiat currency or vice versa is explicitly prohibited for financial institutions, and individuals engaging in such transactions operate in a legal gray area with associated risks. There are no distinctions for short-term or long-term gains, nor are there any tax exemptions, thresholds, or allowances for crypto due to its prohibited status. All forms of engagement with virtual assets, including staking, mining, participation in Decentralized Finance (DeFi) protocols, and trading Non-Fungible Tokens (NFTs), fall under the general prohibition. Similarly, crypto-to-crypto transactions, such as swapping one cryptocurrency for another, are also considered prohibited activities.