Kuwait has adopted a stricter stance on virtual assets and cryptocurrencies. The Capital Markets Authority (CMA), the country’s primary financial regulator, issued a circular on July 18, 2023, outlining comprehensive regulations for virtual assets in the country.
The new regulations from the CMA imposes an absolute ban on a wide range of cryptocurrency-related activities, including payments, investments, and mining within Kuwait.
The CMA stated in the circular:
“It is prohibited to deal with virtual assets as a means of investment, and therefore it is necessary to refrain from providing this type of services to any of the clients.”
Local regulators were also barred from granting licenses to companies seeking to offer virtual asset services as commercial enterprises. However, it’s worth noting that securities regulated by the Central Bank of Kuwait and other financial instruments overseen by the CMA are not affected by this regulation.
According to the CMA, these new regulations align with Kuwait’s ongoing efforts to combat money laundering and terrorist financing.
The regulator stressed that any breach of Kuwait’s Anti-Money Laundering laws will be subjected to the prescribed penalties outlined in Article (15) of Law No. 106 of 2013.
The CMA also advised Kuwaitis to exercise caution when engaging in transactions involving virtual assets, especially encrypted currencies. It emphasized that these assets lack legal status and are not issued or backed by any central authority.
According to a local report by Arab Times, the CMA’s recent restrictions on cryptocurrencies are part of a broader inter-departmental ban on virtual assets in Kuwait. Multiple regulatory bodies in the country, including the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit, have reportedly issued similar directives.
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