Kuwaiti Authorities Crack Down on Crypto: Transactions Now Prohibited

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The Capital Markets Authority (CMA) of Kuwait recently issued a circular imposing a ban on most operations involving cryptocurrencies, including Bitcoin. The circular confirms an “absolute prohibition” on major use cases, such as payments, investments, and mining, related to cryptocurrencies in the country. Furthermore, the CMA has prohibited local regulators from granting licenses to commercial businesses for providing virtual asset services.

It is worth noting that the ban does not apply to securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA. However, the circular emphasizes the need for caution and awareness of the risks associated with dealing with virtual assets, particularly cryptocurrencies. 

CMA stated that cryptocurrencies lack legal status

The regulator highlights that cryptocurrencies lack legal status, are not issued or supported by any asset or issuer, and their prices are often driven by speculation, which exposes them to sharp declines.

The CMA also points out that violating Kuwait’s Anti-Money Laundering laws may result in penalties as specified in Law No. 106 of 2013. The new regulations align with the country’s efforts to combat money laundering and terrorist financing. The CMA cites a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism, which emphasizes the commitment to implementing Recommendation (15) by the Financial Action Task Force.

Reports suggest that the crypto restrictions implemented by the CMA are part of a broader inter-departmental crypto ban in Kuwait, involving various supervisory authorities, including the Ministry of Commerce and Industry, the Central Bank of Kuwait, and the Insurance Regulatory Unit.