Central Reserve Bank of El Salvador declares cryptocurrency illegal and ban ICO

The central reserve bank of El Salvador announced its official position regarding cryptocurrency, saying that they do not have any legal status in the country, therefore responsibility for all transactions made with their use falls entirely on the shoulders of citizens who have decided to do so. Any attraction of funds using crypto-currency is also declared illegal.

The Central Bank emphasizes that in accordance with articles 36 and 37 of the Federal Law, as well as articles 3 and 6 of the monetary and financial legislation, only the national currency and the US dollar are allowed to circulate on the territory of the country. Since Article 184 of the State Banking and Banking Act explicitly prohibits the collection of public funds by any means other than those regulated by El Salvador’s current legislation, the collection of funds through the initial placement of tokens (ICO) is illegal. Like any other operations with digital currencies.

In accordance with these articles, the individual who organizes the collection of funds exchanging or any other operations with the cryptocurrency in the territory of the country will be subject to article 240-A of the Criminal Code providing for imprisonment for a term of five to fifteen years for theft, deprivation and appropriation of other people’s money.

In conclusion of the official press release, it is stressed that there is no legal and regulatory framework for cryptocurrency and other digital assets at the moment, and the purpose of the measures taken is to maintain the most favourable monetary conditions for the economic stability of the country.

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