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A MAN, who invested money on behalf of others through cryptocurrency websites, without acquiring a government licence, has lost his appeal against a three-year jail sentence.
The 26-year-old Bahraini accountant, who describes himself as a ‘financial trader’, reportedly amassed a total of BD65,000 from a number of people, but lost all of it during the trading process.
With promises to ‘increase their income’ and provide them with an extra source of cash, the man was entrusted with fortunes and life savings, all of which disappeared into thin air.
Authorities learned about the illegal investment operation when four of the people who gave him their money reported him for not paying up.
He reportedly received BD45,000 from a Bahraini male investor, and BD3,000, BD2,450 and BD243 from two women and a man.
In October last year, the High Criminal Court convicted the defendant of fundraising and investing cash without acquiring a licence from the Central Bank of Bahrain (CBB) and relevant administrative bodies.
After receiving the amounts, the man would convert the money into digital currency and supposedly traded it using two large cryptocurrency platforms.
Although he admitted to the charge during prosecution hearings, he denied everything when the case went to trial.
Attempting to distance him from responsibility, his lawyer claimed that the four people were his personal friends, who gave him the funds to help ‘increase their income through digital platforms’.
She also stated that the man did return part of the money, though not the entire sum.
On top of the three-year jail sentence, the High Criminal Court ruled that any earnings be confiscated, and ordered him to return all of the funds to their rightful owners.
He attempted to get acquitted through an appeal at the Supreme Criminal Appeals Court, but judges upheld the sentence and conviction.
In Bahrain, it is legal to trade in cryptocurrencies, as long as a licence is acquired from the CBB.
In 2017, the CBB began introducing a framework, known as a ‘regulatory sandbox’, to facilitate developments in financial technology (FinTech), including blockchain-based currencies.
The sandbox allowed for safe experimentation of new technologies, providing a safe space where new business models can be tried and tested without falling foul of regulations.
A Bahrain-based cryptocurrency exchange was launched soon after, and in 2019 became the first in the Middle East to earn a regulatory licence.
In 2019, and after years of drafting and consideration, the CBB issued legislation regulating crypto assets, with the new rules covering licensing, governance, risk management, anti-money laundering and countering financing of terrorism (AML/CFT) measures, business conduct, conflict of interest avoidance, reporting and cybersecurity.
zainab@gdnmedia.bh
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