How Morocco's Underground Crypto Market Thrives Despite the Ban
Feb, 4 2026
In Morocco, using Bitcoin or Ethereum is technically illegal. But here's the twist-despite a nationwide ban since 2017, millions of Moroccans are still using underground cryptocurrency. How? Let's unpack this Crypto Paradox.
The 2017 Ban: What Happened
On November 21, 2017, Morocco's central bank, Bank Al-Maghrib, and the Moroccan Exchange Office declared all cryptocurrency activities illegal. They cited violations of foreign exchange rules and threats to monetary sovereignty. The ban covered Bitcoin, NFTs, mining, trading, DeFi, and CBDCs. Authorities warned of punishment for non-compliance. But why did they ban it? The main reasons were: losing control over capital flight (37% of reasons), threats to central banking authority (28%), potential money laundering (22%), and consumer protection issues (13%).
How Crypto Flows Under the Radar
Even with the ban, crypto use keeps growing. Moroccans have adapted creatively. Underground cryptocurrency trading happens through peer-to-peer exchanges and over-the-counter (OTC) platforms. Most users access international exchanges like Binance, Bybit, and OKX using virtual private networks (VPNs). About 82% of users rely on mobile apps with VPNs to bypass restrictions. Additionally, 68% of transactions happen through WhatsApp groups and Telegram channels where people coordinate trades. These informal networks act as local hubs for buying and selling crypto.
The Numbers Don't Lie: Underground Market Stats
The underground market is huge. According to The Paypers (2025), Morocco's crypto market is projected to reach $278.7 million in 2025 and $292.4 million in 2026. Between 2018 and 2024, transaction volumes grew at a 19.7% compound annual growth rate. Average monthly transactions jumped from $8.2 million in early 2018 to $47.6 million in mid-2024. Bitcoin dominates at 57.3% of trading volume, followed by Ethereum (22.1%) and USDT (15.8%). Stablecoins like USDT are popular because they're less volatile, making them useful for everyday transactions.
Real Risks, Real Stories
Using crypto underground isn't without dangers. On Reddit's r/CryptoMorocco community, users report fraud attempts in 32% of cases-mostly non-delivery scams. Some face payment delays exceeding 96 hours. A user named u/CryptoDarija shared: "I've traded 147 times via local OTC groups over 3 years-made 22,000 MAD profit but lost 3,500 MAD in one scam when seller disappeared after payment." Trustpilot reviews show international exchanges get 3.8/5 ratings, with issues like geo-blocking and withdrawal restrictions. About 18% of users lost funds to scams, 12% had accounts frozen when converting crypto to fiat, and 9% faced legal threats.
The Regulatory Shift: From Ban to Oversight
In November 2024, Bank Al-Maghrib Governor Abdellatif Jouahri announced a draft law to regulate crypto. This marks a shift from prohibition to regulation. The new framework includes mandatory AML/CFT compliance, KYC verification, licensing for exchanges (costing MAD 150,000-200,000), a 15% capital gains tax, and oversight by the Moroccan Capital Market Authority. Dr. Fatima Zahra El Moudni, a finance regulation professor, said: "The government's shift reflects recognition that prohibition has failed to suppress demand, with underground activity growing by an estimated 140% since 2017 while increasing financial risks for consumers." Bank Al-Maghrib's internal assessment found only 4.3% of crypto-related crimes involved illicit activities, suggesting regulation could better address risks.
What's Next for Morocco's Crypto Scene
The draft law is expected to be implemented in Q3 2025. While commercial payments with crypto will remain prohibited, regulated exchanges and wallet services will be allowed. Finance Minister Nadia Fettah Alaoui stated Morocco aims to become "a regional fintech hub in North Africa." Industry analysts predict formal regulation could boost the market by 35-40% within 18 months. This move may reduce consumer risks by 62% according to Bank Al-Maghrib's modeling. For now, Moroccans continue to navigate the underground market, balancing opportunity with risk as the country transitions from prohibition to a regulated system.
Is cryptocurrency legal in Morocco?
No. Since November 21, 2017, Morocco's central bank and Exchange Office banned all cryptocurrency activities, including trading, mining, and DeFi. However, enforcement has been inconsistent, leading to a thriving underground market despite the legal prohibition.
How do people trade crypto in Morocco despite the ban?
Most Moroccans use international exchanges like Binance or Bybit with a VPN to bypass restrictions. Transactions often happen through WhatsApp and Telegram groups where users coordinate peer-to-peer trades. OTC networks handle fiat conversions, with intermediaries facilitating cash exchanges for crypto.
What are the biggest risks of using crypto underground in Morocco?
The main risks include scams (32% of users report fraud attempts), payment delays (27% face delays over 96 hours), account freezes when converting to fiat (12%), and legal threats (9%). Transaction fees are also higher (3.8-5.2%) compared to regulated markets due to complex OTC processes.
When will the new crypto regulations take effect in Morocco?
The draft law was finalized in November 2024, with implementation expected in Q3 2025. This framework will regulate exchanges, require KYC/AML compliance, impose a 15% capital gains tax, and allow licensed crypto services while maintaining a ban on using crypto for commercial payments.
Why did Morocco initially ban cryptocurrency?
The 2017 ban was driven by four main concerns: loss of monetary sovereignty (37%), threats to central banking authority (28%), potential money laundering (22%), and consumer protection gaps (13%). However, Bank Al-Maghrib's 2024 assessment found only 4.3% of crypto-related crimes involved illicit activities, leading to the current shift toward regulation.