Through a recent initiative taken this week, Kuwait has imposed a ban on almost all activities related to digital assets, including bitcoin. On July 18, the country’s primary financial regulator, the Capital Markets Authority (CMA), issued a circular outlining strict guidelines for the supervision and issuance of digital assets within Kuwait’s borders.
An Absolute Prohibition
Within the circular, the CMA reaffirmed its unwavering commitment to an “absolute prohibition” on significant applications and transactions involving digital assets. This encompasses various aspects, such as payments, investments, and mining activities.
Moreover, the circular expressly forbids local regulatory bodies from granting licenses to companies seeking to offer digital asset services as part of their commercial operations.
Meanwhile, it’s essential to mention that the latest prohibitions do not apply to securities and other financial instruments regulated by both the Central Bank of Kuwait and the CMA, as stated in the announcement.
Reasons For The Ban And Possible Penalties
In addition to the prohibitions, the CMA emphasized the importance of customers exercising caution and being fully informed about the “risks” linked to digital assets. Notably, the regulator highlighted that they “lack legal status” and “are not backed or issued by any authoritative entity.”
The circular states:
It is not linked to any asset or issuer, and that the prices of these assets are always driven by speculation that exposes them to a sharp decline.
The measures or penalties stipulated in Article (15) of Law No. 106 of 2013 regarding combating money laundering and terrorist financing shall apply to anyone who violates this circular, without prejudice to the penalties stipulated in each supervisory authority.
