Saudi Arabia has banned the selling and buying of the cryptocurrencies including bitcoins in its territory after the government launched a major crackdown warning against the fraudulent schemes by high risk traders.
The committee said in its statement that the reason was that the bitcoin poses 'negative consequences and high risks on traders' as it cannot be controlled by the government.
The committee which comprised of Saudi Arabian Monetory Authority-the central bank and governemt issued the warning and guidelines on Tuesday.
Saudi Arabia's citizens have been warned not to get convinced for such illusion and get rich schemes as these schemes can be highly misleading. The government also expressed its concerns over the lack of security and cited the market risks involved which also includes signing of fictitious contracts and transfer of funds to unknown recipients.
Calling the crytocurrencies as illegal tender, the Saudi Arabia government has termed it 'fraud'.
The crime rate in the kingdom has increased at an alarming rate and this has prompted the government to form a watchdog which is headed by Capital Market Authority, Ministry of Commerce and Investment, Ministry of Interior membership and Saudi Arabian Monetory Authority.
Saudi Arabia prince Al-Waleed bin Talal criticized Bitcoin during an appearance on CNBC in October last year.
"I just don't believe in bitcoins and cryptocurrencies," he had said and compared it to Enron, the American energy company which flopped in 2000.
The announcement comes after the launch of BiyOasis, which is the first Bitcoin company in the Middle Eastern and North Africa region.