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Kuwait implements ban on cryptocurrencies, puts an end to virtual assets

The Gulf state has banned cryptocurrency use for residents as well.

Kuwait implements ban on cryptocurrencies, puts an end to virtual assets
[Source photo: Anvita Gupta/Fast Company Middle East]

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Kuwait has imposed a ban on the transaction of virtual assets, defined as assets with digital representations of their value that can be digitally traded, transferred, or invested. The Capital Markets Authority (CMA) specifically highlights that mining cryptocurrencies are also prohibited in the country.

As a result of the ban on virtual assets in Kuwait, people in the country are also prohibited from selling or buying non-fungible tokens (NFTs). However, the ban does not extend to digital representations of physical currencies, securities, and other financial assets, as the Capital Markets Authority (CMA) clarified.

In addition to the ban on virtual assets, the Kuwaiti authorities have warned residents about the high-risk nature of these assets, particularly concerning sharp and sudden price declines. The prohibition aligns with Kuwait’s 2013 laws related to money laundering and terrorist financing. Those breaching these regulations could face severe penalties, including financial consequences and imprisonment sentences. 

Some countries like Algeria, Egypt, Morocco, Tunisia, Saudi Arabia, Qatar, Jordan, Turkey, Iran, and Iraq have imposed heavy restrictions or full-on bans on virtual assets in the MENA region. However, Bahrain and the UAE have taken a different approach by encouraging the use of virtual assets, particularly cryptocurrencies, with proper regulation in place.

Binance received a license to operate in Dubai in March 2022. In the same year, Dubai established its Virtual Assets Regulatory Authority to develop guidelines and legal frameworks for digital asset usage. The Central Bank of Bahrain released a paper on virtual assets in November 2020, outlining indicators of their use in the Gulf state.

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