Kuwait Implements Comprehensive Ban On Cryptocurrencies: What You Need To Know

Kuwait joined the list of jurisdictions implementing a comprehensive ban on cryptocurrencies, including Bitcoin BTC/USD and Ethereum ETH/USD, as the country's main financial regulator, the Capital Markets Authority (CMA), issued a circular outlining strict guidelines for virtual asset operations.

The circular reaffirmed the "absolute prohibition" on major use cases and activities related to cryptocurrencies, encompassing payments, investments and mining.

Furthermore, the CMA imposed a ban on local regulators from granting licenses to firms to offer virtual asset services as a commercial business.

The circular clarified securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are exempt from these prohibitions.

The CMA emphasized the need for customers to exercise caution and be aware of the risks associated with virtual assets, particularly cryptocurrencies.

The regulator highlighted cryptocurrencies lack legal status, are not issued or supported by any entity and their prices are susceptible to speculative volatility.

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To ensure compliance, the CMA emphasized the penalties outlined in Kuwait's Anti-Money Laundering laws as stipulated in Article 15 of Law No. 106 of 2013.

The regulatory measures align with Kuwait's efforts to combat money laundering and terrorist financing, as well as the country's commitment to implementing recommendation 15 by the Financial Action Task Force, as highlighted by the National Committee for Combating Money Laundering and Financing of Terrorism.

Reports suggest CMA's restrictions on cryptocurrencies are part of a broader inter-departmental crypto ban involving multiple supervisory authorities in Kuwait.

Similar circulars have been issued by the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit, underscoring Kuwait's comprehensive approach to regulating virtual assets.

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