“Circular to all financial institutions and designated non-financial businesses and professions”
Regarding the procedures required regarding transactions related to virtual assets
Within the scope of strengthening efforts to combat money laundering and terrorist financing, and the conclusions of the study prepared by the National Committee for Combating Money Laundering and Financing of Terrorism regarding the required commitment in the field of applying Recommendation (15) of the international requirements issued by the Financial Action Task Force (FATF) related to dealing with virtual assets , which are defined as assets that have a digital representation of their value, that can be traded or digitally transferred and can be used for payment or investment purposes, as Recommendation (15) requires that virtual assets be considered as “property”, “returns”, “money”, “money or Other assets” or “other corresponding value”, noting that virtual assets do not include digital representations of paper currencies, securities and other financial assets that were addressed in another part of the recommendations of the Financial Action Task Force, we confirm the commitment to the following:
- The 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.
- 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.
- It is prohibited to issue or grant any natural or legal person within the State of Kuwait a license to provide virtual asset services as a commercial business for him or on behalf of others (in addition to the fact that no licenses have been previously issued in this regard).
- 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.
- Absolute ban on all virtual currency/asset mining activities.
This also requires that customers on your part be constantly aware of the risks that may result from dealing in virtual assets (which are carried out through transactions carried out outside the State of Kuwait by customers), especially encrypted currencies, because they do not carry a legal status and are not issued or supported. Any government, and it is not linked to any asset or issuer, and that the prices of these assets are always driven by speculation that exposes them to a sharp decline.
The measures or penalties stipulated in Article (15) of Law No. 106 of 2013 regarding combating money laundering and terrorist financing shall apply to anyone who violates this circular, without prejudice to the penalties stipulated in each supervisory authority.