Introducing/Offering Crypto-assets to Clients
1. Licensees must establish a policy which lays down the internal procedure and risk assessment that a licensee must undertake prior to introducing a crypto-asset for trading by its clients. The policy must be approved by the board and reviewed periodically.
2. Prior to introducing a crypto-asset , a licensee must notify the CBB of its intent to introduce the crypto-asset , provide the findings of the risk assessment undertaken in accordance with Point 8 below along with the board resolution approving the crypto-asset .
3. Licensees must provide a list of all the crypto-assets listed on its platform no later than 10 days from the end of each quarter to the CBB.
4. Licensees must have necessary blockchain monitoring capability (e.g. via monitoring systems, internal monitoring control etc.) in place before introducing the crypto-asset on its platform.
5. Licensees must not introduce crypto-assets that facilitates or may facilitate the obfuscation or concealment of the identity of a customer or counterparty or crypto-assets that are designed to or substantially used to circumvent laws and regulations. Licensees must ensure that they only introduce crypto-assets to which they have in place the necessary AML monitoring capabilities.
6.
(a) any actual or potential conflicts of interest in connection with the review and decision-making process have been assessed and effectively addressed, whether such actual or potential conflicts of interest are related to the licensee’s board members, shareholders employees, their families, or any other party; and
(b) records are maintained of the licensee’s due diligence of each crypto-asset . This includes the final approval for introducing a crypto-asset , the documents the board of directors reviewed including an assessment of all associated material risks in connection with each crypto-asset approval or disapproval, such as reviews and sign-offs by various departments of the licensee , such as the legal, compliance, cybersecurity, and operations department etc.
7. Where the CBB determines that undertaking regulated services in a crypto-asset may be detrimental to the financial sector of the Kingdom of Bahrain and/or it may affect the legitimate interest of clients The licensees , based on the instruction of the CBB, must remove the crypto-asset from its platform. In such scenarios, the licensee shall remain responsible for orderly settlement of trade and any liability arising due to removing the crypto-asset .
Added: January 2024