Kuwait’s financial regulator issued a circular banning the use of cryptocurrencies for payments or investmentsSecurities and other financial instruments which are regulated by the Central Bank of Kuwait and the Capital Markets Authority (CMA) are currently excluded from the prohibitions.
Besides prohibiting cryptocurrencies for payments or investment, the Capital Markets Authority of Kuwait has implemented an “absolute” ban on all digital asset mining.
- To safeguard the public, the regulator has issued a warning against companies providing any form of crypto-related services. The agency also banned the recognition of cryptocurrencies as a decentralized currency.
- Local regulators are also barred from issuing any licenses allowing firms to provide virtual asset services as a commercial business, as per the new circular.
- The prohibitions are aimed at coming into compliance with the Financial Action Task Force’s (FATF) global recommendations for crypto assets and followed a study into the sector by the National Committee for Combating Money Laundering and Financing of Terrorism, according to the regulator.
- The rules were enacted to align with the global recommendations for crypto assets set forth by the Financial Action Task Force (FATF).
- A thorough study was also conducted by the National Committee for Combating Money Laundering and Financing of Terrorism in the digital asset sector before the introduction of the latest measures.
- Meanwhile, the CMA issued a warning to citizens regarding the risks associated with volatile and unregulated cryptocurrencies that lack legal status and added that any violations of these prohibitions would incur penalties.
“This also requires that customers on your part be constantly aware of the risks that may result from dealing in virtual assets (which are carried out through transactions carried out outside the State of Kuwait with the knowledge of customers), especially encrypted currencies, because they do not carry a legal status and are not issued or supported.”
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