Kuwait Bans Crypto Payments, Investment & Mining to Fight Money LaunderingAllgemein
• Kuwait has banned the use of cryptocurrencies for payments, investments, and mining in an effort to comply with FATF global recommendations.
• The Capital Markets Authority issued a circular prohibiting any kind of crypto-related services and warning citizens about the risks involved.
• Violations of the prohibitions will result in penalties.
Kuwait Cracks Down on Crypto
In order to comply with Financial Action Task Force (FATF) global recommendations for crypto assets, Kuwait’s financial regulator issued a circular on Monday banning the use of cryptocurrencies for payments, investments, and mining.
The Capital Markets Authority also placed an “absolute” ban on all digital asset mining, prohibited the recognition of crypto as decentralized currency, and warned the public that companies are not allowed to provide any type of crypto-related services. Exceptions are made for securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority.
The regulator warned citizens of the risks involving volatile, encrypted currencies that do not have legal status. Any violations of the prohibitions would result in penalties.
Purpose Behind Prohibitions
The prohibitions are an effort to meet requirements set by FATF on preventing money laundering via crypto, according to National Committee for Combating Money Laundering and Financing of Terrorism.
Although countries are required to put up guardrails for preventing money laundering, Kuwait’s new restrictions serve as a reminder that authorities are taking stricter measures against illicit activities related to cryptocurrency.