CRA-1.1 CRA-1.1 License for crypto-asset service
CRA-1.1.1
No person may market or undertake the activities, by way of business, within or from the Kingdom of Bahrain, comprised of
regulated crypto-asset services without obtaining a license from the CBB.Added: April 2019CRA-1.1.2
For the purposes of Paragraph 1.1.1, undertake the activities, by way of business means:
(a) Providing one or more of services specified in Paragraph CRA-1.1.6 for commercial gain;(b) Holding oneself out as willing and able to provide the services specified in Paragraph CRA-1.1.6; or(c) Regularly soliciting other persons to engage in providing the services specified in Paragraph CRA-1.1.6.Added: April 2019CRA-1.1.3
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: February 2019CRA-1.1.4
For the purpose of this Module, any promotion, offering, announcement, advertising, broadcast or any other means of communication made for the purpose of inducing recipients to purchase, exchange, or otherwise acquire financial services in return for monetary payment or some other form of valuable consideration shall be considered "marketing" in accordance with Resolution No. (16) for the year 2012.
Added: April 2019CRA-1.1.5
The activities will be deemed to be undertaken 'within or from the Kingdom of Bahrain', if, for example, the person concerned:
(a) Is incorporated in the Kingdom of Bahrain;(b) Uses an address situated in the Kingdom of Bahrain for its correspondence; or(c) Directly solicits clients within the Kingdom of Bahrain.Added: April 2019Regulated Crypto-Asset Services
CRA-1.1.6
Regulated crypto-asset services means the conduct of any or any combination of the following types of activities:(a) Reception and Transmission of order: The reception from aclient of an order to buy and/or sell one or morecrypto-assets and the transmission of that order to a third party for execution.(b) Trading incrypto-assets as agent: Acting to conclude agreements to buy and/or sell for one or morecrypto-assets on behalf of theclients .(c) Trading incrypto-assets as principal: Trading against proprietary capital resulting in conclusion of transactions in one or morecrypto-assets .(d) Portfolio Management: Managingcrypto-assets belonging to a client and the arrangement for their management are such that thelicensee managing thosecrypto-assets has a discretion to invest in one or morecrypto-assets .(e) Crypto-asset Custodian: safeguarding, storing, holding, maintaining custody of or arranging on behalf of clients forcrypto-assets .(f) Investment Advice: Giving or offering, to persons in their capacity as investors or potential investors or as agent for an investors or potential investor, a personal recommendation in respect of one or more transactions relating to one or morecrypto-assets . A "personal recommendation" means a recommendation presented as suitable for theclient to whom it is addressed, or which is based on a consideration of the circumstances of that person, and must constitute a recommendation to buy, sell, exchange, exercise or not to exercise any right conferred by a particularcrypto-asset , or hold a particularcrypto-asset .(g) [This subparagraph was moved to CRA-1.1.6(f) in April 2019].(h) Crypto-asset exchange: means a crypto-asset exchange, licensed by the CBB and operating in or from the Kingdom of Bahrain, on which trading, conversion or exchange of:(i)crypto-assets for fiat currency or vice versa; and/or(ii)crypto-assets for anothercrypto-asset ,
may be transacted in accordance with the Rules of thecrypto-asset exchange .(i) Digital token advisor: advise and guide adigital token issuer on all matters relating to offering ofdigital tokens , trading ofdigital tokens as well as on the responsibilities and obligations of thedigital token issuer pursuant to the provisions of applicable law, rules and regulations.Amended: April 2023
Added: February 2019CRA-1.1.6A
Licensees intending to offerregulated crypto-asset services which were not included in its application for licence and/or additional services which are not part of theregulated crypto-asset services specified in Paragraph CRA-1.1.6, must seek the CBB’s prior written approval before offering the service.Licensees must provide the CBB with detailed description of the new services, the resources required and the operational framework for such service.Added: April 2023Exclusions
CRA-1.1.7
The following activities do not constitute
regulated crypto-asset services :(a) the creation of crypto assets;(b) the development, dissemination or use of software for the purpose of creating or mining a crypto asset;(c) a loyalty programme; or(d) any other activity or arrangement that is deemed by the CBB to not constitute undertakingregulated crypto-asset services .Amended: April 2023
Added: April 2019CRA-1.1.8
Depending on the type of
regulated crypto-asset services that a person wishes to undertake, applicants may seek to be licensed by the CBB under one of the following 4 categories of license:Added: April 2019Category 1
CRA-1.1.9
Category 1
licensees may undertake one or moreregulated crypto-asset service , as listed below:(a) Reception and transmission of orders;(b) Provide investment advice in relation tocrypto-assets .Amended: April 2023
Added: April 2019CRA-1.1.10
When undertaking the
regulated crypto-asset services listed under Rule CRA- 1.1.9, Category 1licensees :(a) Must not hold any client assets or client money;(b) Must refrain from receiving any fees or commissions from any party other than the client; and(c) Must not operate acrypto-asset exchange .Added: February 2019Category 2
CRA-1.1.11
Category 2
licensees may undertake one or moreregulated crypto-asset services , as listed below:(a) Trading incrypto-assets as agent;(b) Portfolio Management;(c) Crypto-asset custody;(d) Investment advice.Amended: April 2023
Added: April 2019CRA-1.1.12
When undertaking the
regulated crypto-asset services listed under Rule CRA- 1.1.11, Category 2licensees may hold or controlclient asset andclient money but must not deal from their own account ("dealing as principal") or operate acrypto-asset exchange .Added: February 2019Category 3
CRA-1.1.13
Category 3
licensees may undertake one or moreregulated crypto-asset services , as listed below:(a) Trading incrypto-assets as agent;(b) Trading incrypto-assets as principal;(c) Portfolio Management;(d) Crypto-asset custody;(e) Investment advice;(f) To act as a digital token advisor.Amended: April 2023
Added: April 2019CRA-1.1.14
When undertaking
regulated crypto-asset services listed under Rule CRA-1.1.13, Category-3licensees may hold or controlclient assets andclient money, may deal on their own account ("dealing as principal") but must not operate acrypto-asset exchange .Added: April 2019Category 4
CRA-1.1.15
Category 4
licensees may undertake one or moreregulated crypto-asset service , as listed below:(a) Operate a licensedcrypto-asset exchange ;(b) Crypto-asset custody service;(c) To act as adigital token advisor .Amended: April 2023
Added: April 2019CRA-1.1.16
Licensees offering crypto-asset exchange service (licensedcrypto-asset exchange ) must not execute client orders against proprietary capital, or engage in matched principal trading.Added: April 2019CRA-1.1.16A
Pursuant to Section CRA-15.4 (Trading and Settlement of Digital Tokens), licensees may undertake over-the-counter trading in
digital tokens which are issued in accordance with the requirements of Chapter CRA-15. The requirements of Paragraph CRA-1.1.16 are not applicable to trading indigital tokens provided the CBB has provided the licensee with an approval to trade thedigital token under the over-the-counter trading framework.Added: April 2023CRA-1.1.17
When undertaking the
regulated crypto-asset services listed under Rule CRA-1.1.15, Category-4licensees may hold or controlclient asset andclient money .Added: April 2019CRA-1.1.18
Persons wishing to be licensed to undertake the activities of
regulated crypto-asset services must apply in writing to the CBB in accordance with the requirements stipulated in CRA-1.2.Amended: April 2023
Added: April 2019CRA-1.1.19
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-1.1.20
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-1.1.21
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-1.1.22
Applicants seeking a
regulated crypto-asset service license must satisfy the CBB that they meet, by the date of grant of license, the minimum criteria for licensing, as contained in Chapter CRA-2. Once licensed, theregulated crypto-asset service licensee must continue to meet these criteria on an on-going basis.Added: April 2019CRA-1.1.23
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-1.1.24
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-1.1.25
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019Combining Regulated Crypto-asset Services
Differentiation Between Intermediary Activity and Exchange Activity
CRA-1.1.26
Category-1, Category-2 and Category-3
crypto-asset licensees intending to operate solely as a broker and/or dealer for clients (intermediary service) are not permitted to structure their broking / dealing service or platform in such a way that it would be deemed as operating a market i.e. acrypto asset exchange . The CBB would consider features such as allowing for price discovery, displaying a public trading order book (accessible to any member of the public, regardless of whether they are clients), and allowing trades to automatically be matched using an exchange-type matching engine as characteristic of acrypto-asset exchange .Added: April 2023CRA-1.1.27
Category 1, Category 2 and Category 3
crypto-asset licensees should design and structure their operations, user interface, website, marketing materials and any public or client-facing information such that it does not create the impression that it is running a licensedcrypto asset exchange . In practice, category 1, category 2 and category 3 crypto-asset licensees must not:(a) Display any publicly-accessible information that may appear like a trading order book;(b) Provide for any price discovery; and(c) Give actual or potential clients the impression that they are interacting with a licensedcrypto-asset exchange .Added: April 2023