The Kuwaiti government has taken a stand against cryptocurrencies, with the Capital Markets Authority (CMA) issuing a circular on the regulation of virtual assets in the country.
The circular leaves no room for ambiguity, as it confirms an “absolute prohibition” on major use cases and operations involving cryptocurrencies, effectively banning payments, investments, and mining activities.
As part of the comprehensive crackdown, the CMA has also barred local regulators from granting licenses to firms seeking to offer virtual asset services as commercial businesses.
However, it’s important to note that traditional securities and financial instruments, regulated by both the Central Bank of Kuwait and the CMA, are exempt from these latest restrictions.
The CMA’s circular also serves as a cautionary statement to customers about the inherent risks associated with virtual assets. In particular, the regulator singles out cryptocurrencies, stating that they lack legal status and are not backed or issued by any authority.
The new regulations align with Kuwait’s ongoing efforts to combat money laundering and terrorist financing, a priority highlighted by the regulator.
In doing so, the CMA cites a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism, emphasizing its commitment to implementing recommendation 15 by the Financial Action Task Force.
As Kuwait solidifies its stand against cryptocurrencies, those found in violation of the country’s Anti-Money Laundering laws, as specified in Article 15 of Law No. 106 of 2013, could face penalties.
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