Legal Crypto In Brunei

Cryptocurrency Regulation in Brunei

Introduction

As at June 2025 there is limited regulation of cryptocurrency in Brunei, and there is no dedicated legislation on the legal status of cryptocurrency. They are sometimes described as virtual or digital currencies, and they are not considered legal tender or currency, but given intangible asset status, or the traditional classification of intangible assets that is developing in these new technology networks by blockchain or other decentralized systems. Regulatory attention is essentially concentrated on AML, CTF and developing tax regulations. The Autoriti Monetari Brunei Darussalam (AMBD) is taking a prudent approach to focus on financial stability and to protect consumers, while the government is considering a middle ground to encourage innovation. This article provides an overview of Brunei’s regulation for virtual currencies, relevant legislative developments, popular trading models, main trading platforms, as well as an emerging decentralized finance and NFT markets. It calls for a framework of rules governing the cryptocurrency space, and also outlines sample rules and guidance for users.

Cryptocurrency Legal Standing

Classification and Oversight

In Brunei, crypto, like Bitcoin and Ethereum is considered as virtual digital asset and not a commodity, security and money. They are used as digital currencies for use as a medium of exchange in specific transactions, but are not recognized as legal tender in the country by the AMBD. Virtual asset service providers (VASPs) are also required to comply with AML/CTF requirements pursuant to the Anti-Money Laundering Order, 2011. The AMBD does non directly regulate cryptocurrencies unless they become part of the existing legislation of the financial instruments. For those of you that don’t speak Spanish XFI reads, A Virtual Asset Regulatory Framework will be developed by Q4 2025 to support the alignment of Brunei Darussalam with international industry best practices, reinforce consumer protection, and to facilitate a stable and secure market.

Tax and Banking Developments

The taxation of digital currencies is unexplored in Brunei, as there is no cryptocurren… Brunei Does Not Have Dedicated Cryptocurrency Tax Rules in June 2025: No Tax on Crypto Transactions and Asset Gains? Revenue received from transactions of cryptocurrency is normally assumed to be capital gains or business income according to the Income Ta Act with its corresponding taxes. We have brought in no transaction taxes in specific such as tax on source of deduction. Banking access for crypto industry players is also very restrictive, with financial institutions wary because of AMBD’s risk-averse approach. But there’s no explicit prohibition on banking crypto groups. “Virtual Assets Regulatory Framework (VARF)” would likely resolve access to banking problems and clarify rules, the official said, citing public comments by AMBD and discussions with regional fintechs.

Legislation for the Crypto Market

Anti-Money Laundering Order, 2011

The Anti-Money Laundering Order, 2011, forms the base of Brunei’s crypto economy regulation. It mandates VASPs, such as exchanges and wallet services, to register with the AMBD’s Financial Intelligence Unit (FIU) and have in place KNC (know-your-customer), transaction monitoring and reporting suspicious activity. These measures meet international AML/CTF standards and apply in respect of custodial and, where relevant, non-custodial services.

Income Tax Act

Income Tax Act applies to both investment income and business income earned from cryptocurrency. Profits are subject to tax either as capital gains or business income. There are no exact provisions for cryptocurrencies, and such tax reporting may become uncertain. The lack of a bespoke tax regime has already led to debate among the country’s crypto community on sites such as X, again indicating some sort of clarity is required.

Proposed Legislature on the Regulation of Virtual Assets

The Virtual Assets Regulatory Framework, which will take effect by the end of 2025, is intended to provide a framework to regulate crypto assets. It is expected to provide for the licensing of VASPs, increase consumer protections and to clarify AMBD’s role in upervision. The framework is inspired by international best practices and local feedback, demonstrating Brunei’s desire to balance innovation with risk management.

Harmonization with International Standards

Brunei’s crypto laws are in line with recommendations from Financial Action Task Force (FATF) concerning AML/CTF requirements. The authorities engage Asean on regulation of digital assets, signalling a willingness to align with global best practices. "This approach could set a precedent for future legalisation, and especially contribute to pending regulation, such as the Virtual Assets Regulatory Framework.

Regulatory Summary Table

Regulation	Description	Key Requirements	Effective Date
Anti-Money Laundering Order, 2011	Core regulation for AML/CTF compliance in crypto transactions.	KYC, FIU registration, transaction monitoring, suspicious activity reporting.	2011
Income Tax Act	Governs taxation of crypto-related income as capital gains or business income.	Standard tax reporting for profits; no specific crypto provisions.	Ongoing
Virtual Assets Regulatory Framework (Proposed)	Aims to provide a comprehensive crypto regulatory framework.	Expected to include licensing, consumer protections, and market stability measures.	Late 2025 (anticipated)
FATF Alignment	Aligns Brunei’s crypto laws with global AML/CTF standards.	Compliance with international financial transparency standards.	Ongoing

Cryptocurrency Exchanges and Methods

Popular Exchanges

Crypto Exchanges in Brunei Cryptocurrency trading and exchange business is gradually becoming popular in Brunei despite very few exchanges available for the locals. International exchanges such as Binance, Kraken, and Coinbase are the major players here, allowing access to leading digital currencies like Bitcoin and Ethereum in line with Brunei’s Know Your Customer (KYC) policies. The local exchanges are few and far between, but exchanges such as Coinhako (with SGD and accessible from Brunei) provide smooth platforms and fiat on-ramps. All this is in line with AML/CTF regulation.

Methods of Exchange

Bruneians predominantly trade crypto on global exchanges via bank transfer (local interbank transfer or international wire) and credit/debit card. Some peer-to-peer (P2P) tools such as Paxful and LocalBitcoins help match individuals who want to trade cryptocurrencies to settle those transactions using mobile-payment applications or bank transfers. Cryptocurrency ATMs are not common in Brunei, and the uptake is mainly in cities such as Bandar Seri Begawan. Binance OTC desks also offer private trading for high-net-worth individuals who are looking to trade in sizable amounts.

DeFi Market

Regulation and Operations

DeFi is beginning to show its face in Brunei, though by June 2025 it is still unregulated. Global DeFi protocols including Uniswap, Aave, Compound for lending, borrowing, and yield farming. Custodial DeFi services could potentially be categorized under AML/CTF laws pursuant to the Anti-Money Laundering Order and thus the need for KYC. Concern There are no DeFi regulations, therefore there are concerns popped on, that smart contract would be attacked and deceived in the regional fintech discussion, such as X.

Global Influence and Research

The proposed Virtual Assets Regulatory Framework It might not directly but indirectly address DeFi by keeping in line with FATF’s developing view on decentralized platforms Meanwhile, research on the part of regional universities like Universiti Brunei Darussalam sheds light on DeFi’s promise for financial inclusion while stressing the importance of regulatory clarity to manage risks.

NFT Market

Status and Regulation

NFTs are considered digital assets in accordance with Brunei’s general civil laws with no dedicated acts as of June 2025. Artistes as well as collectors from Brunei trade digital art, collectibles, and gaming assets on platforms like OpenSea and Rarible. There are no exceptions to long-term holdings and NFT transactions profit is taxed under standard income tax as per the Income Tax Act. The upcoming Virtual Assets Regulatory Framework might also include some NFT guidelines, particularly in the areas of intellectual property and fraud prevention.

Risks and Research

Local reports have also highlighted the speculative nature of NFTs and risks, including legal disputes over intellectual property and market fluctuation. Brunei’s legal community speaks out on the need for clarity in their regulatory framework for investor protection, amid widespread global fears regarding NFT scams and gray areas of the law.

Use-Value of User Information

• Best Exchanges: Binance, Kraken, Coinbase (global, compliant in Brunei); Coinhako (regional, easy to use)
• Exchange Options: Global exchanges for bank transfers and card payments, P2P with Paxful or LocalBitcoins, a handful of crypto ATMs in the major cities, and OTC desks for larger trades.
• DeFi Use: Interact with Uniswap, Aave and Compound; unregulated risk and AML obligations for custodial use cases Notify me when Form is Active
• NFT Notes: Trade on OpenSea or Rarible; confirm intellectual property rights; face typical income tax on profits.
• Regulatory Compliance: VASPs are required to register with AMBD’s Financial Intelligence Unit (FIU), conduct KYC, and track transactions according to the Anti-Money Laundering Order.
• Tax There are no clearly stipulated guidelines on the treatment of crypto assets and NFT income for tax purposes- tax is usually based on the legal nature of transactions or in the case of crypto assets, based on the legal classification as property or commodities.

Recent Developments and Outlook

Legislation and Regulation in the Sequence of Events

The Anti-Money Laundering Order, 2011 and the Income Tax Act serve as a base for regulating cryptocurrencies in Brunei. The forthcoming Virtual Assets Regulatory Framework due in late 2025 also aims to strengthen consumer protection, banking access barriers, and to harmonize with international practices. These are the types of developments that illustrate Brunei’s careful but encouraging manner of nurturing crypto innovation while mitigating risks.

Conclusion

Cryptocurrency in Brunei is changing, and at the moment, the Anti-Money Laundering Order and Income Tax Act make up the existing regulation. The High-level Conceptual Framework introduces a step in the direction of an enabling legislative framework which embraces and balances innovation and consumer protections. Adoption is enabled by worldwide exchanges, P2P platforms, and the limited crypto ATMs, but unregulated DeFi and NFT markets promise opportunities as well as risks. Accommodating to international standards, like FATF guidelines, Brunei will be in a strong position to foster a mature digital asset ecosystem and with more transparent regulation on DeFi and NFTs, market stability and investor protection will also be improved.