Kuwait bans crypto and virtual asset transactions

The state of Kuwait is the latest jurisdiction to ban almost all operations involving cryptocurrencies such as bitcoin (BTC).

On 18 July, Kuwait’s main financial regulator, the Capital Markets Authority (CMA), Issued A circular on supervision and issuance of virtual assets in the country.

In the circular, the CMA reaffirmed its commitment to a “complete ban” on key use cases and operations involving cryptocurrencies, including payments, investments as well as mining.

The circular bars local regulators from issuing any licenses that allow firms to provide virtual asset services as a commercial business.

Meanwhile, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are excluded from the latest restrictions, the announcement notes.

In addition to the prohibitions, the CMS also expected customers to exercise caution and be aware of the risks involved in dealing with virtual assets. The regulator specifically singled out cryptocurrencies, arguing that they “do not have legal status and are not issued or supported.”

CMA said:

“It is not linked to any asset or issuer, and the prices of these assets are always driven by speculation which leads to sharp declines in them.”

The regulator noted that penalties for violating Kuwait’s anti-money laundering laws are set out in Article (15) of Law No. 106 of 2013.

Connected: UAE has emerged as a pro-Bitcoin mining destination in the Middle East

The regulator said Kuwait’s new rules are in line with the country’s measures to combat money laundering and terrorist financing. The CMA also referred to the findings of a study by the National Committee to Combat Money Laundering and the Financing of Terrorism in relation to the commitment to implement Recommendation (15) by the Financial Action Task Force.

According to local reports, the CMA’s crypto ban is part of a new interdepartmental crypto ban in Kuwait, involving multiple supervisory authorities. Reportedly similar circulars have also come Issued by the Central Bank of Kuwait, the Ministry of Commerce and Industry and the Insurance Regulatory Unit.

magazine: Tokenizing Music Royalty as NFTs Could Help Be the Next Taylor Swift