The Bahrain central bank imposes new regulations over crypto crowdfunding and will compel operators of crowdfunding platforms to ensure that the products are suitable for the clients so let’s read more today in our latest cryptocurrency news.
The Bahrain Central Bank issued new guidelines that apply to operators of crowdfunding platforms for the first time since 2017 which is a statemetn from the central bank and the new regulations cover the principles which govern the operations of the platform as well as the rules which apply to offer and disclosures made by the crowdfunding platform. The new regulations are covered under the Crowdfunding Platform Operators Module which addresses the segregation of client money from the platform operators and other measures to ensure the safe operation of the activity but also the regulations compel the platform operators and ensure the suitability of the products which are being offered to retail clients.
In the remarks after the announcement, the CBB’s director of the regulatory policy unit, Shireen Al Sayed noted that the moves of the bank will improve the provision of financial services and added:
“Due to the increased demand for introducing new financing products to serve SMEs and start-ups, the CBB has been keen to review the crowdfunding platform operator regulations to be in line with the economic recovery plan for the financial sector in terms of providing a conducive environment for crowdfunding platform operators.”
According to Al Sayed, the regulations are easy to understand and come with minimum safeguards to ensure the platforms don’t pose risks to the financial sector. Another CBB executive Yasmeen Al-Sharaf, the Fintech director was quoted saying that the crowdfunding avails an alternative funding source for the startups:
“Fintech solutions have the potential to enhance capital flows to the economy commensurate with the growth and expansion plans of entrepreneurs through this new source of funding, thereby, helping to develop the businesses of these start-ups.”
The CBB concludes the statements by asserting that crowdfunding is an innovative way used by smaller enterprises, and startup companies to get funding.
Bahrain became the first Middle-East, North-Africa country to grant Binance approval in principle to establish itself as a crypto service provider. Binance as the world’s leading crypto exchange by trading volume has to complete the full application process and get a license from the Central Bank of Bahrain. The company also said in a press release they expect to complete the process in due course.
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