• 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 2019

    • CRA-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 2019

    • CRA-1.1.3

      [This Paragraph was deleted in April 2023].

       

      Deleted: April 2023
      Added: February 2019

    • CRA-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 2019

    • CRA-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 2019

    • Regulated 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 a client of an order to buy and/or sell one or more crypto-assets and the transmission of that order to a third party for execution.
        (b) Trading in crypto-assets as agent: Acting to conclude agreements to buy and/or sell for one or more crypto-assets on behalf of the clients.
        (c) Trading in crypto-assets as principal: Trading against proprietary capital resulting in conclusion of transactions in one or more crypto-assets.
        (d) Portfolio Management: Managing crypto-assets belonging to a client and the arrangement for their management are such that the licensee managing those crypto-assets has a discretion to invest in one or more crypto-assets.
        (e) Crypto-asset Custodian: safeguarding, storing, holding, maintaining custody of or arranging on behalf of clients for crypto-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 more crypto-assets. A "personal recommendation" means a recommendation presented as suitable for the client 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 particular crypto-asset, or hold a particular crypto-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 another crypto-asset,
        may be transacted in accordance with the Rules of the crypto-asset exchange.
        (i) Digital token advisor: advise and guide a digital token issuer on all matters relating to offering of digital tokens, trading of digital tokens as well as on the responsibilities and obligations of the digital token issuer pursuant to the provisions of applicable law, rules and regulations.
        Amended: April 2023
        Added: February 2019

      • CRA-1.1.6A

        Licensees intending to offer regulated crypto-asset services which were not included in its application for licence and/or additional services which are not part of the regulated 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 2023

    • Exclusions

      • 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 undertaking regulated crypto-asset services.
        Amended: April 2023
        Added: April 2019

      • CRA-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 2019

    • Category 1

      • CRA-1.1.9

        Category 1 licensees may undertake one or more regulated crypto-asset service, as listed below:

        (a) Reception and transmission of orders;
        (b) Provide investment advice in relation to crypto-assets.
        Amended: April 2023
        Added: April 2019

      • CRA-1.1.10

        When undertaking the regulated crypto-asset services listed under Rule CRA- 1.1.9, Category 1 licensees:

        (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 a crypto-asset exchange.
        Added: February 2019

    • Category 2

      • CRA-1.1.11

        Category 2 licensees may undertake one or more regulated crypto-asset services, as listed below:

        (a) Trading in crypto-assets as agent;
        (b) Portfolio Management;
        (c) Crypto-asset custody;
        (d) Investment advice.
        Amended: April 2023
        Added: April 2019

      • CRA-1.1.12

        When undertaking the regulated crypto-asset services listed under Rule CRA- 1.1.11, Category 2 licensees may hold or control client asset and client money but must not deal from their own account ("dealing as principal") or operate a crypto-asset exchange.

        Added: February 2019

    • Category 3

      • CRA-1.1.13

        Category 3 licensees may undertake one or more regulated crypto-asset services, as listed below:

        (a) Trading in crypto-assets as agent;
        (b) Trading in crypto-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 2019

      • CRA-1.1.14

        When undertaking regulated crypto-asset services listed under Rule CRA-1.1.13, Category-3 licensees may hold or control client assets and client money, may deal on their own account ("dealing as principal") but must not operate a crypto-asset exchange.

        Added: April 2019

    • Category 4

      • CRA-1.1.15

        Category 4 licensees may undertake one or more regulated crypto-asset service, as listed below:

        (a) Operate a licensed crypto-asset exchange;
        (b) Crypto-asset custody service;
        (c) To act as a digital token advisor.
        Amended: April 2023
        Added: April 2019

      • CRA-1.1.16

        Licensees offering crypto-asset exchange service (licensed crypto-asset exchange) must not execute client orders against proprietary capital, or engage in matched principal trading.

        Added: April 2019

      • CRA-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 in digital tokens provided the CBB has provided the licensee with an approval to trade the digital token under the over-the-counter trading framework.

        Added: April 2023

      • CRA-1.1.17

        When undertaking the regulated crypto-asset services listed under Rule CRA-1.1.15, Category-4 licensees may hold or control client asset and client money.

        Added: April 2019

      • CRA-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 2019

      • CRA-1.1.19

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.1.20

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.1.21

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-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, the regulated crypto-asset service licensee must continue to meet these criteria on an on-going basis.

        Added: April 2019

      • CRA-1.1.23

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.1.24

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.1.25

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

    • Combining 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. a crypto 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 a crypto-asset exchange.

        Added: April 2023

      • CRA-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 licensed crypto 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 licensed crypto-asset exchange.
        Added: April 2023