Kuwait is the most recent nation to prohibit virtually all transactions involving cryptocurrencies such as Bitcoin. However, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are exempt from the ban.
The Capital Markets Authority (CMA), Kuwait’s primary financial regulator, issued a circular on the supervision and issuance of virtual assets on July 18.
The CMA reaffirmed its commitment to the “absolute prohibition” of cryptocurrency payments, investments, and mining in the circular.
In addition, the circular prohibits local regulators from issuing licenses enabling firms to offer virtual asset services for profit.
In the interim, the announcement notes that securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are exempt from the latest prohibitions.
In addition to the prohibitions, the CMA demanded that consumers be vigilant and conscious of the risks associated with virtual assets. The regulator highlighted cryptocurrencies, arguing they lack legal status and are not issued or supported.
The CMA further stated:
“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.”
Article 15 of Law No. 106 of 2013 specifies the penalties for violating Kuwait’s Anti-Money Laundering laws, the regulator noted.
The regulator stated that Kuwait’s new regulations align with the country’s efforts to combat money laundering and terrorism financing. The CMA also cited a study conducted by the National Committee for Combating Money Laundering and the Financing of Terrorism regarding the commitment to implement Financial Action Task Force recommendation 15.
According to local reports, the CMA’s crypto restrictions are part of a new interdepartmental crypto prohibition involving multiple regulatory agencies in Kuwait. According to reports, the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit have issued similar circulars.
