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    Kuwait Bans All Crypto Activities

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    Financial regulators of Kuwait ban major crypto activities, citing unregulated status and volatility risks as key concerns.

    Kuwait is adopting an aggressive stance on virtual assets and crypto. The country’s primary financial authority, the Capital Markets Authority (CMA), has issued an announcement that solidifies its intent to outlaw major activities related to cryptocurrencies. In a joint move, key supervisory bodies in Kuwait, including the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit have cooperated in releasing the circulars.

    The authorities lay particular emphasis on a complete ban on essential cryptocurrency applications such as payments, investments, and mining. They also explicitly mention the prohibition of utilizing virtual assets for investment purposes. Despite these stringent measures, it’s essential to note that the recent prohibitions don’t encompass securities and other financial instruments that come under the jurisdiction of the Central Bank of Kuwait and the CMA.

    Moreover, the CMA, along with other local authorities, is prohibiting the issuance of licenses to businesses that propose to offer commercial services related to cryptocurrencies. The Central Bank of Kuwait has now specified 46 transactions and procedures applicable to companies, banks, and supervised entities. These transactions must receive the Central Bank’s approval before processing at the Ministry of Commerce and Industry.

    These measures are part of an expansive crypto ban in Kuwait, which integrates the efforts of multiple supervisory authorities.

    Reasons for Kuwait’s Crypto Ban

    The supervisory bodies have issued stern warnings about the potential dangers of virtual assets and cryptocurrencies. They attribute these risks to the unregulated nature of these assets and the lack of governmental backing. It has been observed that speculative forces often sway the prices of these assets, making them susceptible to drastic declines.

    The CMA, in its advisory role, stresses that customers should approach virtual assets with caution and maintain a high degree of awareness regarding their inherent risks. In previous announcements, the CMA has alerted citizens about the volatility and the regulatory challenges associated with cryptocurrencies. The authority has also asserted that any violations of the prohibitions could incur penalties under Kuwait’s Anti-Money Laundering laws, as per Article 15 of Law No. 106 of 2013.

    This bold move towards crypto prohibition aligns with the results of a study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism. These findings reinforce the commitment to implement Recommendation 15 by the Financial Action Task Force (FATF).

    The FATF requires countries to implement measures to combat money laundering. It also obliges crypto firms to record and share data on transactions that exceed a specific threshold as per the FATF’s travel rule. However, the international watchdog has not required countries to enforce a blanket ban on cryptocurrencies. This makes Kuwait’s new prohibition on virtual assets and cryptocurrencies particularly noteworthy.

    The post Kuwait Bans All Crypto Activities appeared first on Crypto Academy.

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