The state of Kuwait is the latest jurisdiction to ban almost all operations involving cryptocurrencies such as bitcoin (BTC).
On July 18, Kuwait’s main financial regulator, the Capital Markets Authority (CMA), issued a circular on monitoring and issuing virtual assets in the country.
In the circular, the CMA reaffirmed its commitment to a “complete ban” on major use cases and operations related to cryptocurrencies, including payments, investments and mining.
The circular also bars local regulators from issuing licenses that would allow companies to provide virtual asset services as a commercial business.
Meanwhile, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are excluded from the latest restrictions, the announcement said.
In addition to the prohibitions, CMS also requires customers to exercise due diligence and be aware of the risks associated with dealing in virtual assets. The regulator specifically highlighted cryptocurrencies, arguing that they “have no legal status and are not issued or supported”.
“It is not tied to any asset or issuer, and the prices of these assets are always driven by speculation which causes them to fall heavily.”
Penalties for violating Kuwait’s anti-money-laundering laws are set out in section (15) of Law no. 106 of 2013, the regulator noted.
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The regulator said Kuwait’s new rules are in line with the country’s measures to combat money laundering and terrorist financing. The CMA also referred to the findings of a study by the National Committee on Anti-Money Laundering and Terrorist Financing regarding the commitment to implement the Financial Action Task Force’s recommendation (15).
According to local reports, the CMA’s crypto ban is part of a new cross-departmental crypto ban in Kuwait involving multiple regulatory authorities. Similar circulars have reportedly also been issued by the Central Bank of Kuwait, the Ministry of Trade and Industry, and the Insurance Regulatory Unit.
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