The prohibitions are an effort to meet requirements set by the FATF on preventing money laundering via crypto, the Capital Markets Authority said.
Kuwait has prohibited the use of crypto for payments or investment to combat money laundering, according to a circular by the country’s financial regulator issued on Monday.
The Capital Markets Authority also placed an “absolute” ban on all digital asset mining, prohibited the recognition of crypto as decentralized currency, and also warned the public that companies are not allowed to provide any type of crypto-related services.
“Securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority are excluded from this prohibition,” the circular said.
The prohibitions are aimed at coming into compliance with the Financial Action Task Force’s (FATF) global recommendations for crypto assets, and followed a study into the sector by the the National Committee for Combating Money Laundering and Financing of Terrorism, according to the regulator.
Although countries are required to put up guardrails for preventing money laundering, and adhere to the FATF’s travel rule – which requires crypto firms to collect and share data on transactions above a certain threshold – the international watchdog has not asked countries to ban crypto, it told CoinDesk in May.
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, the notice said.