Haram? Kuwait Bans Cryptocurrencies

Kuwait has become the latest country to put a blanket ban on all cryptocurrency-related activities, citing a crackdown on money laundering and terror financing. According to the circular issued by the Capital Markets Authority (CMA), there is an “absolute prohibition” on major use cases and operations of cryptocurrencies.

Crypto Transactions Are Not Allowed in Kuwait

The order covers cryptocurrency exchanges, payments, investments, and mining operations.

“Absolute prohibition of using virtual assets as a payment instrument/method or recognizing it as a decentralized currency in the State of Kuwait, and, therefore, you must refrain from conducting transactions whereby virtual currencies are used as a payment instrument/method within the scope of this prohibition,” the circular stated (translated from Arabic).

“It is prohibited to deal with virtual assets as a means of investment, and, therefore, it is necessary to refrain from providing this type of services to any of the clients.”

The order further bans local authorities from handing out licenses to companies offering services around virtual assets. However, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are excluded from the latest prohibition order.

In addition, the regulator highlighted that cryptocurrencies “don’t carry a legal status and are not issued or supported” and asked customers to be cautious of any associated risks.

“It is not linked to any asset or issuer, and the prices of these assets are always driven by speculation that exposes them to a sharp decline,” the order added.

Varying Crypto Regulations

Regulating cryptocurrencies has become a priority globally. However, the stance of the regulators varies. Some jurisdictions like Hong Kong and Dubai are progressive in regulating cryptocurrencies, while countries like Canada have pushed several crypto exchanges away with their tough requirements.

While only a handful of countries, including China, completely ban crypto, many have imposed a ban on crypto payments. Thailand and Russia are two countries that allow crypto investments but ban payments. Belarus is also planning to impose a ban on peer-to-peer crypto payments.

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