On July 18, the CMA, Kuwait's primary financial regulator, released a circular outlining the supervision and issuance of virtual assets in the country. The circular emphasized the CMA's commitment to a blanket ban on significant use cases and operations involving cryptocurrencies, cross-border payments, investments, and mining.
The ban extends to local regulators, prohibiting them from issuing licenses to firms intending to offer virtual asset services as a commercial business. However, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are not affected by these prohibitions, as per the announcement.
In addition to the prohibitions, the CMA has also urged customers to tread with caution, highlighting the risks associated with virtual assets. The regulator specifically pointed out cryptocurrencies, arguing that they lack legal status. The CMA further noted that crypto are not linked to any asset or issuer, and their prices are always driven by speculation, exposing them to sharp declines.
The repercussions for breaching Kuwait's Anti-Money Laundering laws are stipulated in Article 15 of Law No. (106) of 2013, the regulator added.
Kuwait's latest regulations align with the country's efforts to thwart money laundering and curb the financing of terrorism. The CMA also referred to a study by the National Committee for Combating Money Laundering and Financing of Terrorism, emphasizing the commitment to applying recommendation 15 by the Financial Action Task Force.
Local reports suggest that the CMA's crypto restrictions are part of a broader inter-departmental crypto ban involving several supervisory authorities in Kuwait. Analogous directives have also been released by the Central Bank of Kuwait, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit.