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Kuwait uses a heavy hand: cryptocurrencies are no longer in the odor of sanctity with a new circular from the Capital Markets Authority (CMA). It establishes that the use of bitcoin and its smaller brothers is now prohibited, both for payments and investments. Mining has also been banned. Offenders will face severe penalties in all cases.
Kuwait bans the use of cryptocurrencies
Cryptocurrencies have always reeked of sulfur to the Kuwaiti authorities. Already in 2017 they had warned banks and other intermediaries that cryptocurrencies were not legal tender and had banned institutions from managing digital assets. Likewise, local businesses have never been allowed to offer cryptocurrency services. The circular is careful to underline that there is no such license in Kuwait.
So far, however, the regulator has tolerated their use by private individuals, with the exception of payments in crypto, which are strongly discouraged. Now it seems the noose is tightening with the release ofa circular dated 18 July relating to a “absolute prohibition” of cryptocurrency-related activities, including as a means of settlement or investment. Every private individual who interacts with the ecosystem will henceforth be liable to fines and prison sentences.for money laundering or unlawful financing offences.
The measures or sanctions foreseen by the article (15) of the law n. 106 of 2013 on the fight against money laundering and terrorist financing apply to anyone who violates this circular, without prejudice to the sanctions envisaged by each supervisory authority.
Circular of 18 July 2023
In support of its decision, the regulator cites the recommendations of the Financial Action Task Force (FATF) to combat money laundering and terrorist financing. However, while the intergovernmental body has been working for years to develop drastic measures to regulate Bitcoin, DeFi and NFTs, it has never explicitly supported their banning.
Mining has also come under fire
Kuwait's regulator is also targeting mining as part of its action to tighten its anti-crypto stance, as the emirate has been able to attract bitcoin miners due to its low cost of electricity, which even puts it in pole position in terms of profitability for BTC mining, according to the site's estimates. 911 Metallurgist.
Finally, the MFA concludes its circular by strongly urging Kuwaitis to exercise extreme caution if they are tempted to trade cryptocurrencies across borders.
Note that securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are exempt from these prohibitions.
Gulf states more crypto-friendly
With this circular, shared in the wake of the other financial authorities of the country, including second local mediaKuwait distinguishes itself from its Arab neighbors. Indeed, with the exception of Qatar, the other Gulf states have undertaken policies of openness towards operators in the sector in recent months..
While the UAE and Dubai were the quickest to predict this sector as an engine of economic growth, Bahrain and Oman followed suit. Saudi Arabia, which has been slower to get started, has also jumped into the race, wanting to offer, like its neighbors, an opportunity for economic growth. an attractive legislative framework and dedicated infrastructure.
Binance, Kraken, Bybit, Crypto.com… have not been insensitive, all rushing to this region of the Middle East to open a local branch.
Finally, we know that enforcing bans on cryptocurrencies, especially bitcoin, which is spiraling out of government control, is a challenge. The International Monetary Fund (IMF), despite its principal disdain for this asset class, believes that in a recent report is this is probably not a viable solution.
While some countries have banned crypto-assets altogether due to the risks they pose, this approach may prove ineffective in the long run.
Regulations are inevitable in the world of cryptocurrencies, but fortunately not all of them bring down the ban, so take this opportunity to take your first steps in the world of cryptocurrencies. Register now at the Bitget platform (trade link) and benefit from a lifetime discount on trading fees.
