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Kuwait, an oil rich country in the Middle East puts a ban on crypto transactions in the latest development. Capital Markets Authority (CMA) of Kuwait has confirmed the news in a public statement about prohibiting all virtual asset operations.

In a circular issued by CMA, it was explicitly stated on how digital assets operations will take place in the jurisdiction of Kuwait. The circular affirms that there is an absolute ban on most of the crypto operations which includes investments, payments and mining. Moreover, the authority has strictly prohibited local regulators from issuing any licenses for virtual asset services to the commercial businesses.

It is worth mentioning here that this ban does not apply to securities and other financial instruments which comes under CMA and Central Bank of Kuwait’s regulations.

The regulatory authority clarified that usually crypto assets are subject to manipulation and speculation which leads towards sharp decline in their prices. Moreover, it stated that cryptocurrencies do not have legal status and are not issued by a legal issuer or asset.

Why is Kuwait banning crypto?

CMA clarified that implementation of such regulations in the country is to fight against terror financing and money laundering evils. This is an inter department effort to ban crypto as same circulars have been issued by the Insurance Regulatory Unit, Central Bank of Kuwait and Ministry of Commerce and Industry. Pakistan has also completely banned crypto trading in the country by the start of this year due to same fears.

CMA has further warned that penalties will be imposed to those who violate the laws related to cryptocurrencies in the country as specified in Article 15 of Law No. 106 of 2013.

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