A Crypto Trader’s Nightmare: Top 12 Worst Countries For Digital Asset Holders And Investors

Dabbling in crypto is fairly easy if you live in the US, Dubai or Estonia. It becomes much trickier if you reside in one of the many so-called Global South countries and other regions with limited freedoms.

Fortunately (or sometimes not), the crypto landscape isn’t static – some jurisdictions, previously hostile to crypto, now welcome digital assets with friendly rules, while others take a step back, enforcing harsh restrictions, steep taxes, or outright bans.

Below, we highlight the 12 worst places for crypto owners and traders based on today’s regulations.

China – a crypto powerhouse turned police state

China is easily one of the worst jurisdictions for cryptocurrency owners and traders. The country has been maintaining an extremely strict and hostile regulatory environment for several years. In 2021, Beijing imposed a comprehensive ban on crypto trading and mining, driven by concerns over financial stability, money laundering, and capital flight. Currently, digital tokens are not recognized as legal tender or assets, and all crypto transactions are effectively illegal in the mainland.

Recent regulations have further tightened restrictions, requiring banks to flag, report, and block “suspicious” cross-border transactions related to cryptocurrencies, Forex trading, and online gambling. Banks must identify users involved in risky crypto trades and can impose financial restrictions or blacklist them, limiting access to banking services. Hong Kong has adopted a more crypto-friendly approach, allowing licensed exchanges to operate but there’s little hope that mainland China will follow this path anytime soon.

Historically, China was a global crypto powerhouse, accounting for about 67% of Bitcoin mining by 2020. However, the 2021 ban forced miners and crypto companies to move abroad, and the government has since promoted its own digital currency, the e-CNY (digital yuan), as the sole legal digital asset.

Turkmenistan – extremely low crypto safety

Few can point Turkmenistan on a map, but those who know a tad about it will surely guess it’s not a crypto investor’s dreamland – as you can expect in a cult-of-the-leader type of regime. Indeed, Turkmenistan’s combination of an implicit crypto ban, draconian foreign-currency controls, information isolation and internet censorship doesn’t make for a safe haven for crypto geeks.

Turkmenistan hasn’t released any credible information regarding the legal status of cryptocurrencies. However, the country forbids financial institutions from dealing in digital assets, which effectively restricts both individual and business crypto activity. The country lacks any formal legal framework or licensing regime for digital-asset activities, leaving all interested parties to operate at their own risk in a regulatory void.

Additionally, as per FreemanLaw.com, Turkmenistan has been ranked by Cointobuy’s analysis tool as 207th out of 249 countries regarding crypto safety, with a 1.5/10 safety grade. This speaks for itself.

Nepal – all things crypto are banned

A fabulous destination for climbers and hikers but not so much for crypto lovers. Nepal is one of the few countries that enforce an absolute ban on all cryptocurrency activities. In a notice dated 13 August 2017 the Nepal Rastra Bank (NRB) – Nepal’s central bank – declared Bitcoin and other virtual currencies illegal since under the NRB Act (2002) and the Foreign Exchange (Regulation) Act (1962).

Overall, the institution issued multiple notices – in 2017, 2019, 2021, 2022, and 2023 – prohibiting trading, mining, remittance, and promotion of digital assets. In September 2021, the ban extended explicitly to crypto trading and mining, and by January 2023 internet providers were ordered to block access to all crypto-related websites. Nepal offers no legal framework for exchanges or service providers. Violators face harsh penalties coupled with inconsistent prosecutions by the Central Investigation Bureau. Considering all of the above, Nepal ranks among the worst jurisdictions for crypto holders and investors.

Afghanistan – dabble in crypto and risk jail

Afghanistan easily qualifies as one of the world’s most hostile jurisdictions for crypto owners and traders. In August 2022, the Taliban government issued a blanket ban on all cryptocurrency activities, declaring digital assets “haram” under Islamic law. Authorities warned that anyone found trading or holding crypto would face serious consequences – and you don’t want to find out yourself what that means in Afghanistan.

Following the ban, security forces shuttered at least 16 local crypto exchanges (notably in Herat province) and arrested employees and traders for non-compliance. These crackdowns sent a clear message: crypto dealings are treated as criminal offenses.

There is virtually no way to evade restrictions. Afghanistan offers no legal framework for licensing or supervising crypto businesses. Digital assets are neither recognized nor protected by any statute, leaving traders exposed to arbitrary enforcement actions, including fines, asset seizure, or arrest, without any guarantee of due process.

Iraq – outright crypto prohibition

Iraq, another war-torn country, also scores poorly on crypto-friendliness. In 2017, the Central Bank of Iraq (CBI) officially prohibited crypto activities. The reason? As usual: risks of financial crime, market volatility, and lack of consumer protection. The decree banned banks, exchanges, and payment providers from facilitating any crypto transactions, effectively rendering digital assets illegal.

The stance was reaffirmed in a Circular No. (125/5/9) issued by the CBI on 22 November 2021. It explicitly prohibited supervised financial institutions – including banks, non-bank financial intermediaries, and electronic payment service providers – from any engagement in crypto transactions. On 26 March 2022, the institution produced a follow-up directive that banned the use of payment cards, e-wallets, and other financial instruments for speculative trading or transactions involving cryptocurrencies.

Despite the ban, unofficial cryptocurrency trading exists, as Iraqis try to hedge against inflation and currency devaluation. However, the country’s underdeveloped digital infrastructure limits access to crypto services. Attempted transactions on foreign exchanges may lead to frozen accounts or geoblocking of Iraqi IP addresses, forcing traders into peer-to-peer markets. The risk of scams and fraud is also considerable.

Burundi – crypto traders, stay away!

If you’re dreaming of a decentralized future, Burundi also isn’t your ideal destination. The country has taken a hostile approach to digital currencies after reports of some citizens losing money while trading digital assets. Concerns related to money laundering, scams, and financial instability also contributed to the outright ban. Strict AML and counter-terrorism financing regulations have made life hard for crypto users and companies.

Exchanges and wallet providers face obstacles, including intense KYC processes and detailed reporting obligations. The measures are meant to protect consumers and the economy but they’ve also created a maze of red tape discouraging innovation and making it tough for individuals and companies to get involved in the crypto market.

There have been reports on new legislation emerging to clarify the cryptocurrency status but reliable information is scarce. Currently, regulators in Burundi seem to be focused more on preventing risk than finding the middle ground to enable progress.

Republic of the Congo – crypto legislation is absent

In the Republic of Congo, a stone’s throw from Burundi (across the thick jungle of the Democratic Republic of the Congo), things are pretty much similar. The country is highly inhospitable for crypto traders because of the near-total absence of regulatory clarity or institutional support.

Digital assets remain in a grey area, being neither formally banned nor legally recognized. This situation creates a high-risk environment for anyone dealing with crypto. Without official guidance, investors and businesses have no assurance about what’s permitted and what could land them in trouble.

Moreover, as part of the Communauté Économique et Monétaire de l'Afrique Centrale (CEMAC), the Republic of the Congo is indirectly bound by the Central African banking regulator (BEAC), which has banned the use of cryptocurrencies by financial institutions across the region. This means local banks cannot legally engage with crypto-related activities, effectively cutting off access to fiat on- and off-ramps.

For users eager to explore crypto on a peer-to-peer basis, the practical barriers are steep. Internet penetration remains low, financial digitalization is underdeveloped, and there’s a widespread lack of awareness or education about crypto technologies.

Egypt – cryptocurrencies are not haram

If you’re hoping to live large off your crypto investments, Egypt is another country you’ll want to cross off your list. Once cautiously enthusiastic towards blockchain innovation, the country has swung heavily toward strict regulation, making crypto use technically illegal – even though not explicitly criminalized in general law.

In 2017, Egypt’s Dar al-Ifta (the country’s Islamic authority) declared cryptocurrency haram, i.e., forbidden under Islamic law), citing concerns about volatility, fraud, and the lack of central authority. At least since then, Egyptian law enforcement has reportedly (ab)used anti-money laundering and anti-terrorism laws to detain or interrogate crypto users. Additionally, in 2020, the Central Bank of Egypt (CBE) banned issuing, promoting, or trading cryptocurrencies without a license, making life all the more difficult for digital asset holders.

Unfortunately, Egypt’s government has shown no intention of creating a regulatory framework for crypto — instead, it’s focused on developing a central bank digital currency (CBDC), which further sidelines decentralized crypto. As a result, many popular exchanges and crypto-related websites remain blocked, forcing users to rely on VPNs, which in itself can attract unwanted attention from authorities.

Reports suggest a high level of digital surveillance, especially for financial activity involving foreign or peer-to-peer transfers. Those who risk engaging in crypto transactions can face steep fines or imprisonment.

Algeria – a crypto trader’s nightmare

Algeria, two countries west of Egypt, also paints a grim picture with a complete prohibition on all aspects of cryptocurrency. Since the Algerian Financial Law was passed in 2018, all use, holding, buying, and selling of cryptocurrency have been strictly prohibited. Regulations explicitly outlaw virtual currencies, considering them a threat to the national economy and monetary policy and linking them to money laundering and terrorist financing risks.

Anyone caught using or trading crypto can face criminal charges, including fines and imprisonment. Enforcement is unpredictable but harsh. According to reports, the mere possession of crypto can lead to legal trouble. The access to digital assets is also difficult. Crypto exchanges are banned, and there is no legal way to convert dinars to digital assets. Users cannot legally access platforms, and VPN use is risky and potentially easy to track with tight state control over internet access.

Unlike some other “unfriendly” jurisdictions that at least signal future crypto regulation, Algeria has shown zero interest in allowing crypto in any form. This means no protection, no investment opportunities, and no room for fintech or blockchain innovation. In short, don’t go there or get the hell out of there.

Tunisia – crypto users risk prosecution

Even though Tunisia – another country in the region – is eager to adopt blockchain technologies for combating fraud and other purposes, it doesn’t take kindly to cryptocurrencies. In 2018, the country’s central bank issued a statement cautioning against the use of any digital asset not approved by the state. The institution quoted risks related to volatility, fraud, and illegal activities. This wasn’t just a cautionary note – the statement effectively criminalized crypto usage, turning even basic transactions involving Bitcoin into a potentially prosecutable offense.

Soon after, a young Tunisian man was arrested for simply using Bitcoin, sparking outrage and concern within Tunisia’s tech community. The message was clear, tough – using crypto could lead to serious legal consequences. Currently, Tunisia offers no legal or regulatory path forward. There are no licenses, no regulatory sandboxes, and no support structures. In fact, public financial institutions remain staunchly opposed to the use of decentralized digital assets.

This absence of a progressive or even adaptive policy framework leaves Tunisian crypto enthusiasts in limbo – with no way to legally own, trade, or invest in digital assets. Additionally, international crypto exchanges are either inaccessible or extremely difficult to use from within Tunisia. Users often face blocked websites, rejected card payments, and – obviously – a lack of integration with the local banking system.

Morocco – crypto is banned (but the ban may soon be lifted)

Morocco is further proof that the Maghreb – no matter how great it is for tourism – is not a welcoming place for crypto. Investors dabbling in digital assets face repressive regulations and legal risks.

Things started to go wrong in November 2017, when Office des Changes – a government institution responsible for foreign exchange regulations and monitoring international transactions – declared that “transactions via virtual currencies constitute a breach of regulations, punishable by penalties and fines.” Simultaneously, Morocco’s central bank, Bank Al-Maghrib (BAM), officially banned cryptocurrencies citing concerns over financial stability, fraud, and money laundering. These steps made all crypto transactions illegal and pushed the market into the shadows.

Moroccan authorities have actively enforced the ban. Arrests and legal consequences for people found trading or promoting crypto have been common. Popular crypto exchanges remain geo-blocked or are shut down by ISPs upon government request. VPNs and peer-to-peer platforms help users evade restrictions but also carry legal risks.

However, there’s a silver lining ahead. The ban has obviously created a hostile environment for blockchain and DeFi (decentralized finance) initiatives. But unlike Algeria, Morocco appears to be learning from the economic downsides of its crypto ban. What’s more, the public hasn’t really been compliant – Morocco ranks 27th globally in crypto adoption, despite the prohibition, making it one of Africa’s most engaged crypto markets.

As a result, Bank Al-Maghrib (BAM) has announced plans to draft legislation that will replace the current ban with a comprehensive regulatory framework. The bill aims to gradually legalize crypto, protect investors, ensure financial system stability, encourage fintech innovation, and expand financial access — all while maintaining strong safeguards against money laundering and terrorism financing. Still, it’s too early for Moroccans to uncork the champagne.

Qatar – crypto is gharar (and, thus, prohibited)

Despite its wealth, Qatar ranks among the world’s most restrictive jurisdictions on cryptocurrencies. In 2018, the Qatar Central Bank banned financial institutions from crypto trading, citing risks like financial crime. Violators face strict penalties, including fines, license revocation, and operational restrictions under QCB law. In 2019, the Qatar Financial Centre Regulatory Authority further prohibited virtual asset services within the Qatar Financial Centre.

Qatar’s ban extends to individuals as well. The Central Bank has repeatedly warned citizens and residents against engaging in crypto transactions. Non-compliance may be subject to financial penalties and even legal action. Crypto trading, mining, or operating exchanges are all considered violations of national law, placing anyone involved at serious legal risk.

A part of Qatar’s rationale lies in aligning financial policy with Islamic banking principles. Authorities have expressed concerns over the speculative nature of cryptocurrencies, viewing them as high-risk instruments lacking intrinsic value. These characteristics conflict with core Islamic finance doctrines, which emphasize transparency, asset-backing, and the avoidance of excessive uncertainty (gharar). For crypto traders and blockchain entrepreneurs seeking friendly shores, the bottom line is simple – look elsewhere.