The EBC introduces new principles for operations on crowdfunding platforms with respect to the placement of offers and disclosure of information.
Objectives: prevention of conflicts of interest, know-your-customer (KYC) due diligence of borrowers/issuers, separation of client money from platform operators’ funds, and other measures to ensure the safe conduct of operations. The new rules require crowdfunding platform operators to ensure that products offered on the platform meet the needs of retail customers.
Commenting on the new rules, Ms. Shireen Al Sayed, director of regulatory policy at SVB, said that the regulator is trying to make sure that the rules are in line with the financial sector’s economic recovery plan – due to the increased demand for new financial products for entrepreneurs and startups.
According to the director, emerging business models, such as Cryptocurrency crowdfunding, have the potential to provide new alternative funding sources for new startups and serve as a catalyst for the growth of such ventures.
Bahrain became the first country in the Middle East and North Africa to give the largest Cryptocurrency exchange, Binance, approval in principle to operate as a Crypto-services provider.