Kuwait based YallaBit crypto exchange faces regulatory hurdles
Yallabit, a crypto exchange operating out of Kuwait under a general license is facing regulatory hurdles with regards to its operation in Kuwait. As per a letter on its website from its CEO Talal Alyaseen, the crypto exchange which has been operating in Kuwait since 2017 and which according to him has been compliant in every way with proper KYC, AML/CFT has been rejected by the regulatory Sandbox Framework at Kuwait Central Bank.
As Alyaseen states, ” Sometime in the first quarter of 2019, we had applied to the Regulatory Sandbox Framework at the Central Bank of Kuwait to obtain a proper regulatory body and license within the State of Kuwait. Unfortunately, the reply we got was that we didn’t meet the criteria. Come today, a year and a half later, after our application to be in the Regulatory Sandbox Framework (almost three years since the start of our operations), we started to experience payment provider outages on the 2nd of September 2020. Every time we onboard a new payment provider, their service would last a week, and then we suffer from account closure. By the end of September, we had exhausted all our payment providers’ options due to the closures.”
The Kuwait banks were closing accounts and requesting a cryptocurrency license to continue Yallabit’s operations, stating that the General Trading license was not enough. AlYaseen explains, ” it is impossible to have a cryptocurency license as there is no such license in the state of Kuwait, neither at the Ministry of Commerce and Industry, nor at the Capital Markets Authority, or at the Central Bank of Kuwait.”
As such Yallabit is now left with a few bank accounts and has received no reply from Central bank according to its CEO. Given the current situation Yallabit is no longer able to accept any KWD deposits as they don’t have a payment provider.
Alyaseen explains, “You may continue to sell/buy with your current balance, withdraw/deposit Cryptocurrencies is still operational (you can continue to store your crypto with us). KWD withdrawals are still operational. If you have any KWD balance left in your YallaBit account and you do not intend to use it, please withdraw it to your bank account to be safe. As we may not be able to process KWD withdrawals, in the worst-case scenario that our bank decides to close our account.”
Yallabit in its communication states they might have to move to a different country and are looking into other alternatives. In a comment made to UNLOCK AlYaseen states, Currently, we’re still operational regardless of the friction and we have no intention of giving up. We have not been shut down and can still do crypto to fiat transactions. We will share more information in a week or so.”
It is interesting that in June of 2020 DigiDinar announced that it was launching its regulated crypto exchange in Kuwait with a technology and brokerage license issued from the Ministry of Commerce and Industry. In light of these new actions, one can only wonder what the word regulated means in Kuwait when it comes to crypto.
