Kuwait, a country located in the oil-rich Persian Gulf, has recently announced a complete prohibition on virtual assets as a form of payment or investment. This ban, encompassing cryptocurrencies, was communicated to both financial institutions and the general public through a circular released by the Capital Markets Authority (CMA), the country’s primary financial regulator.
The ban explicitly advises individuals and entities against engaging in transactions involving decentralized currencies as a method of payment within the state. Additionally, all cryptocurrency mining activities are strictly forbidden.
Furthermore, the ban prohibits the establishment and licensing of businesses that offer virtual assets as an investment or operate as commercial enterprises. It is worth noting that no licenses of this nature have been issued by the authorities.
In addition, the circular contained warnings that customers should be wary of the risks of encrypted currencies:
” because they do not carry a legal status and are not issued or supported. Any government and 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.”
However, it’s important to note that securities and financial instruments issued or regulated by the Central Bank of Kuwait and the CMA are exempt from this prohibition.
According to the circular, this ban is a measure taken by the government to combat money laundering and prevent terrorist financing within the country. The regulator also emphasized that Article 15 of Law No. 106 of 2013 outlines the consequences for violating Kuwait’s anti-money laundering regulations.
According to the local media, the CMA’s crypto restrictions are part of a new inter-departmental crypto prohibition in Kuwait. Multiple supervisory authorities, including the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit, have all issued similar circulars.
With this development, Kuwait has joined the ranks of countries like Qatar and China, implementing a complete ban on cryptocurrencies such as Bitcoin and related activities.