<p>In a significant move to combat money laundering and terrorist financing, Kuwait has taken a decisive step by announcing a complete ban on all crypto-related activities.</p><h2 id="header-0">“No legal status”</h2><p>According to a circular<a href="https://www.cma.gov.kw/en/web/cma/cma-board-releases/resolutions-and-regulations/-/cmaboardreleases/detail/1384960" rel="noopener noreferrer nofollow"> issued</a> by the Capital Markets Authority (CMA), Kuwait’s top financial regulator, earlier this week, cryptocurrencies are deemed to have “no legal status” and lack the support of any government or any asset. As a result, the prices of these digital assets are vulnerable to speculative swings, exposing investors to potential substantial losses. Consequently, the CMA asserts that engaging in crypto activities can lead to adverse consequences and financial risks for individuals and businesses alike.</p><p>The ban extends beyond trading and mining. It also prohibits public companies from offering any cryptocurrency-related services. The CMA emphasized that it has never granted approval for crypto services in the past, and this outright ban reinforces the country’s commitment to curbing illicit financial activities facilitated by cryptocurrencies.</p><h2 id="header-1">Aligning with FATF</h2><p>The decision comes in the wake of Kuwait’s determination to align with the Financial Action Task Force’s (FATF) global requirements for handling crypto assets. The country is attempting to demonstrate its compliance with international anti-money laundering guidelines by clamping down on digital assets.</p><p>Kuwait’s approach towards cryptocurrencies diverges significantly from other Gulf states that have embraced the nascent industry with more openness. The likes of the United Arab Emirates (UAE), Saudi Arabia, and Bahrain have previously engaged with crypto assets in various ways.</p><p>For example, Bahrain granted approval to global crypto exchange platform Binance to provide digital asset services within the country. It’s keen to embrace digital assets as it pivots away from an oil-based economy. The Kingdom recently welcomed<a href="https://medium.com/&#64;coinness.gl/singapores-whampoa-plans-crypto-friendly-bank-in-bahrain-95a5a81423c5" rel="noopener noreferrer nofollow"> plans</a> by Singapore-based private equity firm Whampoa Group to establish a crypto-friendly digital bank there.</p><p>Meanwhile, Saudi Arabia’s sovereign wealth fund has also invested in several US-based venture capital funds which are focused on crypto and blockchain technologies.</p><p>Dubai, in particular, has been actively working on establishing a regulatory framework for digital assets, aiming to position itself as a digital hub in the region. The UAE as a whole has recognized crypto assets as securities for several years, fostering a favorable environment for crypto businesses.</p><h2 id="header-2">Criticism</h2><p>News of the ban also provoked criticism, including commentary from Alex Gladstein, Chief Strategy Officer with the Human Rights Foundation. Gladstein, taking to Twitter,<a href="https://twitter.com/gladstein/status/1681675899807342592?s&#61;20" rel="noopener noreferrer nofollow"> stated</a>: “ Not surprising. I expect all authoritarian regimes (especially gulf tyrannies like the UAE and Saudi Arabia) to follow in Kuwait’s footsteps and eventually pass severe restrictions on citizen use of Bitcoin.” While the UAE trends in the opposite direction, Gladstein is not optimistic about the free use of decentralized cryptocurrencies in the UAE over the longer term.</p><p>As the global crypto landscape continues to evolve, each country in the Gulf region is adopting unique approaches to address the opportunities and challenges posed by digital assets. While there may be opposition to the technology, decentralized digital assets will benefit from jurisdictional arbitrage in efforts to get this innovation rolled out for the benefit of ordinary people around the world.</p>

Kuwait Implements Full Ban on Crypto Activities

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