EGYPT Law and Practice Contributed by: Dina Kamel, Helal El Hossary, Omar Fouda and Kareem Hashem, Zaki Hashem
licensing structure, offering staking to the public is prohibited in Egypt. 10.7 Crypto-Related Lending Crypto-backed or crypto-denominated lending is not clearly regulated by a dedicated framework in Egypt. If the product involves virtual currencies, the Central Bank and Banking System Law restriction is the pri - mary issue, and marketing/solicitation can result in risk. 10.8 Cryptocurrency Derivatives Offering cryptocurrency derivatives, a restricted virtual currency, is illegal under the Central Bank and Banking System Law, Article 206, and the Capital Markets Law. 10.9 Decentralised Finance (DeFi) Egypt does not currently operate a dedicated DeFi regulatory regime. If a DeFi product facilitates the trading or promotion of virtual currencies, the Central Bank and Banking System Law restriction remains rel - evant, and decentralisation does not eliminate liability for operators, promoters, brokers or facilitators. 10.10 Regulation of Funds Generally, funds are regulated under the Capital Mar - ket Law, regardless of whether they invest in “block - chain-linked” assets. In practice, funds investing in conventional blockchain-related assets outside of Egypt are permitted according to the existing rules, whereas funds holding virtual currencies are not per - mitted under the Capital Markets Law and the Central Bank and Banking System Law. An investment fund is obliged to follow the investment plan stated in its information memorandum, as approved by the FRA (governed by the Capital Markets Law and the Central Bank and Banking System Law, Article 206). 10.11 Virtual Currencies Virtual currencies are specifically addressed by the Central Bank and Banking System Law. “Blockchain assets” as a broader concept can include many things that are not used as currency. 10.12 NFTs Non-fungible tokens (NFTs) are not regulated inside the financial regulatory framework in Egypt, since any
tradeable asset must be approved by the FRA in order to be traded publicly. 10.13 Stablecoins Stablecoins are typically treated as a form of virtual currency in most jurisdictions, and the Central Bank and Banking System Law restricts their use in the absence of CBE approval of the issuance or dealing thereof.
11. Open Banking 11.1 Regulation of Open Banking
Egypt does not have a Revised Payment Services Directive (PSD2)-style statutory mandate forcing banks to open APIs to third-party providers as a gen - eral right. 11.2 Concerns Raised by Open Banking As per 11.1 Regulation of Open Banking , open bank - ing is not a regulated activity, so this issue is not appli - cable in Egypt.
12. Fraud 12.1 Elements of Fraud
In Egypt, fraud in financial services and fintech is typically prosecuted as one of several different types of offence. Classification as criminal fraud under the Penal Code (Law No 58 of 1937) requires: • deceptive conduct via legally recognised fraudu - lent means (using a false name or acting in a false capacity, creating a false impression about a pro - ject, profit, debt, entitlement, etc); and • provision by the victim of money or other movable property, a document, or a release/settlement, with intent to appropriate the benefit. Cybercrimes Law No 175 of 2018 considers unau - thorised access to bank card or e-payment data an offence, particularly where the purpose is to obtain another’s funds or services. Other offences pertinent to fintech include fabricating or impersonating web - sites, accounts or emails – a common issue in phish - ing and account takeover.
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