 has launched a crackdown on digital financial firms, targeting electronic trading and cryptocurrency operations.){kind=link}
The Kurdistan Regional Government (KRG), the governing body of Iraq’s semi-autonomous Kurdistan Region, has taken a firm stance against digital financial activities, ordering a crackdown on companies involved in electronic trading and cryptocurrencies.
The Ministry of Interior was instructed by the KRG’s Council of Ministers on May 27 to form a special joint committee with the responsibility of closing down businesses engaged in digital currency and electronic trading.
The directive, which is in line with the Central Bank of Iraq’s guidelines, indicates a more widespread national position against uncontrolled cryptocurrency activities.
Crypto Scam in Duhok Prompts $15M Fraud Crackdown
This action comes after two people in the city of Duhok were recently arrested for allegedly masterminding a cryptocurrency scam that duped investors out of $15 million.
Local security sources claim that the suspects employed bogus digital investment schemes to trick unwary victims, which raises concerns about the region’s uncontrolled digital asset trading’s increasing risks.
Rising worries about financial fraud, consumer protection, and the potentially destabilizing impacts of unregulated crypto-related activity are highlighted by the KRG’s decision.
The government wants to crack down on illegal activities and improve control of financial practices, therefore it has formed a joint committee to enforce the shutdowns.
In an effort to strike a balance between innovation, security, and legal compliance, authorities in Iraq may also implement more stringent laws pertaining to digital finance.
Also Read: Kuwait Targets Illegal Crypto Mining in Nationwide Energy Crackdown
Iraq’s Central Bank Warns Against Fake Firms Claiming Licenses
The Central Bank of Iraq has previously issued warnings about fraudulent electronic trading firms falsely claiming to be licensed by the bank.
It clarified that it does not grant licenses to companies dealing in stocks, metals, or cryptocurrencies and takes legal action against those operating under false pretenses.
Iraq initially banned cryptocurrencies in 2017, citing concerns over financial crimes, money laundering, and the potential use of digital assets to fund terrorism.
Despite growing interest in digital currencies globally and increasing adoption in other Middle Eastern markets, crypto trading in Iraq remains heavily restricted.
KRG’s Crypto Crackdown Sparks Debate Over Risks and Innovation
The Kurdistan Regional Government’s (KRG) decision to shut down companies involved in electronic trading and digital currencies is a double-edged sword, with both potential benefits and drawbacks.
On the positive side, the move demonstrates a proactive stance on protecting consumers from fraud and unregulated financial activity.
With a recent crypto scam in Duhok defrauding investors of $15 million, this crackdown may help restore public trust, prevent further financial crimes, and align Kurdistan with the Central Bank of Iraq’s legal framework.
It also gives the government time to develop a clearer regulatory structure for digital assets.
However, on the negative side, an outright shutdown risks stifling innovation and investment in a rapidly growing global sector.
Many countries are moving toward regulated crypto adoption, and Kurdistan’s hardline approach may isolate it from economic opportunities, tech talent, and financial innovation. Instead of a ban, introducing smart regulation could offer a more balanced, forward-looking path.
Also Read: Hong Kong Police Arrest Over 500 Individuals in Massive $199M Crypto-Related Crimes Crackdown