On July 18, Kuwait’s main financial regulator, the Capital Markets Authority (CMA), issued a circular that effectively bans nearly all operations involving cryptocurrencies like Bitcoin in the country. The circular confirms an “absolute prohibition” on major use cases and operations related to cryptocurrencies, including payments, investments, and mining.
The CMA has also prohibited local regulators from issuing licenses to firms that provide virtual asset services as a commercial business. However, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are excluded from these prohibitions.
The regulator emphasized the risks associated with virtual assets, particularly cryptocurrencies, stating that they do not carry legal status, are not issued or supported by any asset or issuer, and their prices are driven by speculation, making them susceptible to sharp declines.
Kuwait’s new regulations align with its efforts to combat money laundering and terrorist financing. The CMA referred to the conclusions of a study by the National Committee for Combating Money Laundering and Financing of Terrorism regarding the commitment to applying recommendations from the Financial Action Task Force.
The CMA’s restrictions on cryptocurrencies are part of a broader inter-departmental crypto ban involving several supervisory authorities in Kuwait. Similar circulars have reportedly been issued by the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit.
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