Lesotho Cryptocurrency Laws Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
In February 2018, the Central Bank of Lesotho released a statement declaring that cryptocurrencies are neither legal tender nor considered foreign currency.[1] Promoting crypto investment opportunities is forbidden in Lesotho because investment advisors are required to have a license to operate under Sections 27 and 28 of the Central Bank of Lesotho Capital Market Regulations of 2014.[2] The Central Bank’s statement warns citizens of the risks associated with cryptocurrencies and emphasized that “cryptocurrencies expose participants to violation of. . . Anti-money laundering and combating of terrorist financing laws; tax laws; and exchange control laws, which are prosecutable transgressions.” [3]However, in November 2019, the Apollo cryptocurrency platform signed a Memorandum of Understanding with the Lesotho government to explore the implementation of Apollo cryptocurrency in governmental initiatives such as facilitating a voting system, implementing a decentralized file storage system, and eventually supporting a marketplace allowing users to buy, sell, and trade physical and digital goods via Apollo.[4]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
[3] Central Bank of Lesotho, The Emerging and Growing Promotion of Cryptocurrencies, (Feb. 2018), https://www.centralbank.org.ls/images/Public_Awareness/Press_Release/Press_Release_-Bitcoin.pdf
[4] Rachel McIntosh, Government of Lesotho Signs MOU with Cryptocurrency Platform, Financemagnates.Com, (Nov. 19, 2019), https://www.financemagnates.com/cryptocurrency/news/government-of-lesotho-signs-mou-with-cryptocurrency-platform/.
