Meeting such requirements for crypto-asset transactions is feasible, as evidenced by the experience of Binance, which has already obtained a crypto-asset license in that country. Therefore, consider the following information if you plan to set up a crypto business in the region and get a cryptocurrency exchange license in Bahrain.
Cryptocurrencies and the regulation of cryptocurrencies in Bahrain
Cryptocurrency exchange licenses in Bahrain can be obtained following the rules of the Central Bank of Bahrain. The regulated activities in this case are:
- receiving and transmitting instructions from customers to buy/sell one or more types of crypto assets, as well as sharing such instructions for execution to a third party;
- executing instructions from clients to buy and/or sell one or more crypto assets by entering into contracts on behalf of clients;
- making transactions on your account – trading using raised capital to conduct transactions using one or more types of crypto assets;
- client portfolio management for investing in one or more types of crypto assets;
- crypto-asset safekeeping;
- providing investment advice;
- exchange of cryptocurrencies for fiat money and vice versa and cryptocurrencies for other cryptocurrencies.
Bahrain’s regulator does not consider the creation and administration of crypto-assets, the development, distribution, and use of software for mining and cryptocurrency operations, and loyalty programs to be regulated activities.
You can get a cryptocurrency license in Bahrain in one of 4 categories. For example, a Category 1 license is issued to market participants providing investment advisory services. Category 2 licenses are issued to participants providing portfolio management and custody of crypto assets. Category 3 licenses are obtained, for example, by participants trading as an agent or trustees (principals). And crypto exchanges receive a Category 4 license. For detailed information about the cryptocurrency license in Bahrain to be obtained in your specific case, please contact the lawyers at Prifinance.
To get a cryptocurrency exchange license in Bahrain, it is necessary to develop a business plan, provide information and documents about the applicant, its shareholders, beneficiaries, purposes of the activity, measures to prevent money laundering and terrorist financing, and other data following the type of activity for which the license for cryptocurrency in Bahrain is obtained.
For more information about the nuances of regulation and taxation of cryptocurrency exchange license in Bahrain in your specific case, the lawyers of Prifinance will be happy to provide you on request.