Kuwait enforces strict ban on cryptocurrency operations

Kuwait has recently taken a significant step by prohibiting almost all cryptocurrency operations, including well-known digital currencies like Bitcoin.

On July 18, the Capital Markets Authority (CMA) of Kuwait issued a circular concerning the supervision and issuance of virtual assets within the country.

The circular solidified the CMA’s determination to enforce an “absolute prohibition” on major cryptocurrency use cases, such as payments, investments, and mining. Moreover, local regulators are now prevented from issuing licenses to businesses offering virtual asset services commercially.

However, it’s worth noting that this ban excludes securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA. This move reflects Kuwait’s cautious approach to handling cryptocurrencies within its borders.

Besides the bans, the CMA also emphasized the need for customers to be cautious and informed about the risks linked to virtual assets.

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The regulator singled out cryptocurrencies, claiming that they “don’t carry a legal status and are not issued or supported.”

The CMA added, “It is not linked to any asset or issuer, and the prices of these assets are always driven by speculation that exposes them to a sharp decline.”

Kuwait’s Anti-Money Laundering laws, outlined in Article 15 of Law No. 106 of 2013, specify penalties for violations, as stated by the regulator.

The regulations are in line with the country’s efforts to combat money laundering and terrorist financing, referencing a study by the National Committee for Combating Money Laundering and Financing of Terrorism regarding adherence to recommendation 15 by the Financial Action Task Force.

Recent reports suggest that the Capital Markets Authority (CMA) has imposed restrictions on cryptocurrencies, as part of an inter-departmental crypto ban involving multiple supervisory bodies in Kuwait, including the Central Bank, Ministry of Commerce and Industry, and Insurance Regulatory Unit.