Kuwait bans cryptocurrency, crypto mining and transacting in virtual assets

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Kuwait announced a ban on the use of cryptocurrency in payments or investments to prevent money laundering.

Regulations unveiled by the country’s Capital Markets Authority (CMA) place an “absolute prohibition” on the use of digital currencies in making payments.

The notification deems all virtual assets illegal. The regulator says it has also banned digital asset mining, refuses to recognise crypto as a decentralised currency and reminds consumers that businesses are barred from providing any services related to cryptocurrency.

“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 circular said.

The cryptocurrency ban

The Central Bank of Kuwait, the Capital Markets Authority, the Ministry of Commerce and Industry, and the Insurance Regulatory Unit issued circulars on supervision on the issue of virtual assets as a tool/means of payment or recognising them as a decentralised currency in Kuwait, in addition to abstaining from conducting transactions whereby virtual currency is used as a payment instrument/method within the scope of this prohibition, reports Al- Jarida daily.

The circulars, which were issued in accordance with the conclusions of the study prepared by the National Committee for Combating Money Laundering and Financing of Terrorism, regarding the required commitment in the field of implementing Recommendation No 15 of the international requirements issued by the Financial Action Task Force (FATF), forbids dealing with these assets as a means of investment.

The circulars say it is necessary to refrain from providing this type of services to any of the customers, or to issue or grant any natural or legal person inside Kuwait a license to provide virtual asset services as a business for his benefit, or on behalf of others, noting that no licenses have previously been issued in this regard. The circulars also ban all virtual currency/asset mining activities.

According to the CMA, the ban is designed to comply with recommendations from the Financial Action Task Force on crypto assets and follow “the conclusions of the study prepared by the National Committee for Combating Money Laundering and Terrorist Financing.”

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