Countries Where Crypto is Illegal: Full List and Why It Matters
David Wallace 2 November 2025 25

Over a billion people live in countries where owning or trading cryptocurrency is against the law. It’s not just a matter of strict rules - in some places, you could go to prison for holding Bitcoin. While the world moves toward digital money, these bans create a strange divide: millions are locked out of a technology that’s reshaping finance elsewhere. This isn’t about fear of innovation - it’s about control. Governments that ban crypto aren’t rejecting technology. They’re rejecting decentralization.

Where Crypto Is Completely Banned

As of 2025, ten countries have outright bans on cryptocurrency. That means no trading, no mining, no holding - not even as a curiosity. These bans aren’t symbolic. They’re enforced with fines, asset seizures, and jail time.

  • China: The world’s strictest crypto ban. In 2021, China shut down all mining operations and banned financial institutions from handling any digital asset transactions. The government didn’t ban blockchain - it banned private control. It’s now pushing its own digital currency, the e-CNY, with full state oversight.
  • Bangladesh: Under the Money Laundering Prevention Act, holding or trading crypto can land you in prison for up to 10 years. The central bank calls it a threat to financial stability, but many locals use underground exchanges anyway.
  • Egypt: The Central Bank of Egypt declared crypto transactions illegal in 2018. Fatwas from religious authorities reinforced the ban, calling crypto haram (forbidden). Despite this, peer-to-peer trading persists through WhatsApp and Telegram groups.
  • Nepal: Nepal’s central bank banned crypto in 2017. In 2023, a man was sentenced to a year in jail for running a crypto exchange. Enforcement is inconsistent, but the legal risk remains high.
  • Morocco: The Bank Al-Maghrib prohibits all cryptocurrency activity. The government cites currency sovereignty and lack of regulatory tools as reasons. Yet, crypto adoption in urban areas has grown steadily since 2020.
  • Afghanistan: After the Taliban took control in 2021, they declared crypto transactions illegal, calling them un-Islamic. Enforcement is patchy, but anyone caught trading risks severe punishment.
  • Algeria: The government banned crypto in 2018, calling it a threat to national currency. The ban covers everything from mining to using crypto for payments. Violators face fines and equipment confiscation.
  • Tunisia: The Central Bank of Tunisia prohibits crypto trading and banking services tied to digital assets. Despite this, Tunisia has one of the highest crypto adoption rates in Africa, with over 18% of adults owning some form of digital asset.
  • Bolivia: Bolivia banned crypto in 2014, one of the first countries to do so. The central bank says it undermines the national currency and enables fraud. Enforcement is rare, but the law remains on the books.
  • Iraq: In 2024, Iraq’s Central Bank issued a formal ban, citing money laundering risks. The country’s banking system is weak, and many see crypto as a way to bypass corruption - which is exactly why officials oppose it.

Why Do These Countries Ban Crypto?

The reasons sound similar across all these nations, but the real motivations are deeper.

Most governments claim they’re protecting citizens from fraud, money laundering, and financial instability. That’s partly true. Crypto’s anonymity makes it attractive to criminals - but so do cash and shell companies. The real issue? Crypto removes control.

When people use Bitcoin to send money across borders, they bypass state-controlled banking systems. When they mine crypto, they use electricity without paying taxes or following energy quotas. When they hold digital assets, they’re not dependent on the local currency - especially dangerous in countries with hyperinflation like Tunisia or Iraq.

China’s case is telling. It banned Bitcoin but built its own digital currency. Why? Because the state wants to track every transaction, not leave it to decentralized networks. The same logic applies to Egypt, Algeria, and Bangladesh - they don’t want citizens using tools they can’t monitor or tax.

Some bans are also tied to political control. In Afghanistan, the Taliban sees crypto as a Western influence. In Turkey, the government banned crypto payments in 2021 after the lira collapsed - not because crypto was risky, but because people were using it to protect their savings.

What About Countries That Partially Restrict Crypto?

Not all restrictions are total. Some countries allow crypto as an investment but ban it as payment. Others block banks from working with crypto firms but don’t criminalize holding it.

  • India: Crypto is legal to hold and trade, but the government taxes it at 30% and bans deductions for losses. Banks can’t process crypto transactions, making it hard to cash out.
  • Russia: Crypto is legal to own, but using it to pay for goods is banned. The government wants to control how digital assets flow in and out of the country.
  • Indonesia: You can trade crypto as a commodity, but not use it to buy anything. The government runs its own licensed exchange to keep control over transactions.
  • Vietnam: Crypto can’t be used for payments, but trading is tolerated. In 2021, fines of up to $8,790 were introduced for violations - but enforcement is rare unless large-scale operations are involved.
  • Turkey: Central bank banned crypto payments in 2021. Citizens still use it to hedge against inflation, and many businesses quietly accept it anyway.

These countries aren’t banning crypto - they’re trying to contain it. They want the benefits of blockchain without losing monetary power. It’s a middle ground, but it creates confusion for users and businesses alike.

Woman exchanging cash for crypto in a bustling market using a hidden VPN

How Do People Still Use Crypto in Banned Countries?

If crypto is illegal, why do millions still use it?

Because the internet doesn’t care about borders. In countries like Nigeria, Vietnam, and even Bangladesh, people use peer-to-peer platforms like LocalBitcoins, Paxful, and Telegram groups to trade. They pay in cash, use gift cards, or swap crypto for mobile airtime.

VPNs are common. People use them to access exchanges like Binance or Kraken, even though those platforms officially block users from banned countries. Some traders use friends abroad to receive crypto and send cash locally - a practice known as “P2P arbitrage.”

There’s also a black market for mining rigs. In places like Nepal and Algeria, people buy secondhand GPUs and run them in basements or garages. Electricity is cheap, and enforcement is weak outside major cities.

These aren’t high-tech operations. They’re grassroots workarounds - built by students, freelancers, and small business owners who see crypto as their only path to financial freedom.

What Happens When You Get Caught?

The penalties vary wildly.

In Bangladesh, you can face up to 10 years in prison. In Egypt, your assets can be seized and you might be blacklisted from banking services. In China, mining equipment is confiscated, and operators are fined up to 10 times the value of the crypto mined.

In Tunisia and Vietnam, fines are common - but rarely enforced unless the case is public or involves large sums. In Afghanistan and Iraq, enforcement depends on local authorities. Some districts turn a blind eye. Others use crypto arrests as political tools.

One thing’s clear: if you’re caught, you’re on your own. There’s no legal support system. No consumer protection. No way to appeal. The law doesn’t recognize your crypto as property - so if it’s seized, you have no recourse.

Crowd breaking free from government control as digital wallets glow

Will These Bans Last?

History suggests they won’t - at least not forever.

India, once one of the most hostile countries toward crypto, now has over 15 million users and a growing regulatory framework. Vietnam, despite its payment ban, is drafting new rules to license crypto exchanges. Even Egypt has started exploring a digital currency of its own.

Pressure comes from three places: young tech-savvy populations, remittance flows, and global competition. Countries that ban crypto are falling behind in blockchain innovation. Startups leave. Investors look elsewhere. Talented developers move abroad.

China’s ban hasn’t stopped its own tech giants from leading in blockchain patents. Russia’s restrictions haven’t stopped its crypto miners from relocating to Kazakhstan. The world is moving toward digital money - and governments that fight it are fighting the tide.

The real question isn’t whether crypto will be banned - it’s whether governments will realize they can’t stop it. They can only choose whether to control it, tax it, or be left behind.

Frequently Asked Questions

Is it illegal to own Bitcoin in any of these countries?

Yes, in the 10 countries with total bans - China, Bangladesh, Egypt, Nepal, Morocco, Afghanistan, Algeria, Bolivia, Tunisia, and Iraq - owning Bitcoin or any cryptocurrency is illegal. This includes holding it in a wallet, even if you never trade it. Authorities consider possession a violation of financial regulations.

Can I use a VPN to access crypto exchanges in banned countries?

Technically, yes - many people do. But it’s risky. Exchanges like Binance and Kraken block traffic from banned countries, and using a VPN to bypass these blocks violates their terms of service. If caught, your account can be frozen, and you could face legal consequences depending on your country’s enforcement policies. It’s not a legal workaround - just a technical one.

Why does China ban crypto but use its own digital currency?

China doesn’t ban digital money - it bans decentralized money. The e-CNY is fully controlled by the People’s Bank of China. Every transaction is tracked, taxed, and regulated. Private cryptocurrencies like Bitcoin remove that control. China wants the efficiency of digital payments without giving up monetary sovereignty.

Are there any penalties for using crypto in partially restricted countries like India or Russia?

In India, using crypto for payments is not explicitly illegal, but you pay a 30% tax on gains and can’t deduct losses. In Russia, using crypto to pay for goods or services is banned - but holding or trading it is legal. Penalties apply only if you violate payment rules or evade taxes. Most users avoid trouble by not using crypto for everyday spending.

What happens to your crypto if you’re arrested for owning it in a banned country?

If you’re arrested, authorities can seize your devices and any crypto wallets they can access. Since crypto is not legally recognized as property, you have no right to reclaim it. Even if you have the private keys, the government can freeze or confiscate the assets. In most cases, the crypto is lost permanently.