Kuwait Bans Most Crypto-related Activities to Prevent Money Laundering
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Kuwait recently became one of the regions with the strictest anti-crypto laws in the world. Similarly to mainland China, Kuwait has almost prohibited the use of cryptocurrencies.
Crypto users can no longer use their coins and tokens to make payments or even invest with them with the goal of earning a profit. Even mining is banned, according to the country’s financial regulator, the Capital Markets Authority (CMA).
In its recent statement, the regulator argued that these methods are necessary in order to prevent money laundering using cryptocurrencies. In addition to all of the mentioned measures, the CMA said that crypto is no longer considered a decentralized currency.
FATF ordered the prevention of money laundering, but it did not require bans
The regulator warned the public that no company is allowed to provide any type of crypto-related service. Any firm that tries to do so will be breaking the law, as all such services are now illegal. The regulator clarified,
Securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority are excluded from this prohibition.
The new prohibitions are intended to ensure compliance with the Financial Action Task Force (FATF)’s new global recommendations for digital currencies.
They also came after a recent study conducted by the National Committee for Combating Money Laundering and Financing of Terrorism, according to the regulator.
The Financial Action Task Force has ordered countries worldwide to set up guardrails to prevent money laundering.
They must also respect the FATF’s travel rule, which forces cryptocurrency companies to collect and share any and all information regarding transactions that pass a certain threshold.
However, the FATF’s rules and instructions did not fully force countries to ban cryptocurrencies and crypto activities.
This was the Kuwait regulator’s own decision, as it seems that the regulator sees no other way of complying with the requirements.
Kuwait’s regulators can no longer issue licenses to crypto firms
The regulator warned its citizens that digital currencies are risky, volatile, and encrypted, stating that they no longer have legal status in the country.
Any violations of the prohibitions would result in sharp penalties.
The ban was announced two days ago, on July 18th. Given the new rules, the local regulators are also prohibited from issuing licenses to crypto companies that would allow them to conduct any of the mentioned activities on the territory of Kuwait.
The CMA’s crypto restrictions are also a part of a new inter-departmental ban on digital assets, which involves several other supervisory authorities in the country.
Similar circulars were issued by the country’s Ministry of Commerce and Industry, the Insurance Regulatory Unit, and also the Central Bank of Kuwait.
