In a circular released by the Capital Markets Authority of Kuwait, the regulator reaffirmed its position that Kuwait strictly prohibits the use of virtual currencies and bans mining activities within the Gulf state. The authority also emphasized the importance for businesses to inform customers about potential “risks that may arise” with dealing with crypto assets not prohibited outside of Kuwait.
Kuwait’s Regulator Warns Businesses of Consequences for Non-compliance Toward Crypto Ban
On July 18, 2023, Kuwait’s Capital Markets Authority, the regulator for financial instruments and securities in the Gulf nation, reiterated its ban on crypto assets. The authority states the rules align with enhancing efforts to combat money laundering and terrorist financing. The regulations also comply with Financial Action Task Force recommendations and standards.
Kuwait’s regulator underscores five critical rules which stipulate an “absolute prohibition of using virtual assets as a payment instrument/method.” Moreover, Kuwaiti businesses are forbidden from engaging with virtual assets as an investment vehicle, requiring firms in the Gulf state to avoid “offering this type of service to any customers.” Crypto asset mining and related activities are also strictly prohibited, and Kuwaiti citizens and businesses must abstain from participation.
Any business violating the regulator’s rules may face penalties, including the potential loss of their business license. The regulator also urges Kuwaiti businesses to educate customers about the purported risks of crypto assets. The bulletin indicates that crypto assets are utilized beyond the borders of the Gulf nation. The regulator emphasizes that these rules are articulated in Article 15 of Law No. 106 of 2013.
Kuwait’s Capital Markets Authority insists crypto assets “are not legal tender, are not issued or supported by any government, are not tied to any asset or issuer, and their prices are always driven by speculation that exposes them to sharp drops.”
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