- July 23, 2023
- Posted by: [email protected]
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Kuwait’s Capital Markets Authority (CMA) has taken a significant step, imposing an “absolute prohibition” on practically all crypto-related activity within the country, echoing the rising global regulatory position on cryptocurrency. Kuwait has officially joined the ranks of nations that have prohibited cryptocurrency transactions such as Bitcoin.
On July 18, the CMA, Kuwait’s principal financial regulator, released a circular outlining the monitoring and issuing of virtual assets in the country. The circular reaffirmed the country’s determination to restrict significant use cases and operations involving cryptocurrencies, including payments, investments, and mining.
Furthermore, the CMA explicitly forbids local regulators from granting licenses to firms seeking to offer virtual asset services as commercial businesses. Notably, the circular excluded securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA from these prohibitions.
In addition to the strict bans, the CMA highlighted the need for customers to exercise caution and be aware of the risks associated with virtual assets. In particular, the regulator emphasized that cryptocurrencies lack legal status and are neither issued nor supported by any authority. Furthermore, their prices are heavily influenced by speculative activity, making them susceptible to sharp declines.
According to the regulator’s statement, violating Kuwait’s anti-money laundering legislation includes penalties stipulated in Article 15 of Law No. 106 of 2013.
The new regulations align with Kuwait’s ongoing efforts to combat money laundering and terrorist financing. The CMA referenced a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism, emphasizing the country’s commitment to applying recommendation 15 outlined by the Financial Action Task Force.
Reports suggest that the CMA’s restrictions on cryptocurrencies are part of a broader inter-departmental crypto ban involving multiple supervisory authorities in Kuwait. Similar circulars have allegedly been issued by the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit.
Kuwait’s resolute stance on cryptocurrency operations demonstrates a growing global trend of governments reassessing their approach to virtual assets and seeking to regulate them more rigorously. As the landscape of cryptocurrency regulations evolves, it remains crucial for individuals and businesses to stay informed and comply with the shifting regulatory landscape to avoid potential penalties and legal ramifications.
