Kuwait Cracks Down on Crypto
• On Monday, the Capital Markets Authority of Kuwait issued a circular banning the use of crypto for payments, investment and mining.
• The move is an effort to comply with the Financial Action Task Force’s (FATF) global recommendations for crypto assets and to combat money laundering.
• Violations of the prohibitions will result in penalties, according to the notice.
Prohibitions in Place
The Capital Markets Authority has 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. The prohibitions are aimed at coming into compliance with FATF’s global recommendations for crypto assets.
Risks Involved
The regulator warned citizens of the risks involving volatile, encrypted currencies that do not have legal status. Therefore, investors should be aware that they could potentially lose their money when investing in cryptocurrencies.
FATF Guidelines
Although countries are required to put up guardrails for preventing money laundering and adhere to 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 cryptocurrency outright.
Conclusion
Kuwait has taken action against cryptocurrency by placing restrictions on payments, investment and mining in order to prevent money laundering via cryptos. Investors should be aware of potential risks involved while dealing with cryptocurrencies due to their volatile nature and lack of legal status.