Kuwait recently became the latest region to impose restrictions on almost all activities related to crypto, like Bitcoin (BTC). On July 18, the Capital Markets Authority, Kuwait’s main financial regulator, issued a circular regarding the issuance and regulation of digital assets in the country.
In the circular, the CMA reaffirmed its strong stance against using cryptocurrencies for significant activities like making payments, investing, and mining. However, authority emphasized an “absolute prohibition” on these uses.
Moreover, the circular prohibits local regulators from granting licenses to companies that want to offer virtual asset services as a commercial business. The circular also noted that securities and other financial instruments regulated by the CMA and the Central Bank of Kuwait are not included in the recent prohibitions.
These prohibitions follow the global recommendations for crypto-assets set by the Financial Action Task Force (FATF). The decision followed a study of the sector conducted by the National Committee for Combating Money Laundering and Financing of Terrorism, as per the regulator.
Countries must prevent money laundering and implement the FATF’s travel rule. This rule requires cryptocurrency companies to collect and share transaction data above a certain threshold. However, the international watchdog clarified that it has not mandated countries to ban cryptocurrencies.
CMA Warned Crypto Enthusiasts
Besides the ban, the CMA advises people to be careful and understand the risks associated with virtual assets. Authority specifically warned about cryptocurrencies, stating that these digital currencies have no legal status and have no support from any agency.
The CMA added:
“It is not linked to any asset or issuer, and that the prices of these assets are always driven by speculation that exposes them to a sharp decline.”
The regulator mentioned that the penalties for breaking Kuwait’s Anti-Money Laundering laws are present in Article 15 of Law No. 106 of 2013.
As per local reports, the CMA’s restrictions on cryptocurrencies are part of a broader crypto ban that involves various supervisory authorities in Kuwait. The Ministry of Commerce and Industry, the Central Bank of Kuwait, and the Insurance Regulatory Unit have apparently issued similar circulars.