• Kuwait has issued a circular prohibiting the use of crypto for payments or investment in order to combat money laundering.
• The new regulations are meant to meet Financial Action Task Force (FATF) requirements on preventing money laundering through crypto.
• Violations of the prohibition will be met with penalties, and citizens are warned about the risks associated with volatile, encrypted currencies.
Kuwait Cracks Down on Crypto
The Capital Markets Authority of Kuwait has issued a circular banning all digital asset mining, payments, investments and recognition of crypto as decentralized currency. This is an effort to meet FATF requirements on preventing money laundering through crypto.
Bans Payments and Investment
The circular prohibits the use of crypto for payments or investment, and companies are not allowed to provide any type of crypto-related services. Securities regulated by the Central Bank of Kuwait and other instruments regulated by the CMA are excluded from this prohibition.
Warns Citizens About Risks
The regulator warns citizens about the risks associated with volatile, encrypted currencies that do not have legal status. Any violations of these prohibitions will result in penalties being imposed.
Meeting FATF Requirements
The prohibitions are an effort to comply with Financial Action Task Force global recommendations for cryptocurrency assets, following a study into the sector by the National Committee for Combating Money Laundering and Financing of Terrorism set up by Kuwaiti authorities earlier this year.
Not Calling For Ban
Despite requiring countries to put guardrails up against money laundering, FATF has not asked countries to ban cryptocurrencies outright but rather urged them to apply their travel rule which requires crypto firms to collect data on transactions above certain thresholds.