Crypto Fraud Crimes Prosecuted Under Bahraini Law
Crypto Fraud Crimes Prosecuted Under Bahraini Law
Bahrain has been active in regulating financial and digital asset crimes, including cryptocurrency fraud. While there isn’t a single “crypto fraud law,” a combination of laws applies:
Legal Framework
Central Bank of Bahrain (CBB) Virtual Assets Regulations
Any person or company operating cryptocurrency services (exchanges, wallets, investment platforms) without a license commits a crime.
Penalties: imprisonment up to 5 years, fines up to BD 500,000.
Penal Code
Fraud, deception, or misrepresentation to obtain money or property is criminal.
Digital fraud using online platforms or apps is treated the same as traditional fraud.
Anti-Money Laundering Law
Concealing or transferring funds obtained through fraudulent schemes is criminal.
Penalties: minimum 5 years imprisonment and fines of not less than BD 100,000.
Cybercrime Law
Using computers, online platforms, or digital tools to commit fraud or deceive investors is punishable.
Enhances penalties when fraud is carried out electronically.
Notable Crypto-Related Fraud Cases in Bahrain
Case 1 – Young Bahraini Man Running a Fake Crypto Scheme
Facts: A man promised investors high returns from cryptocurrency trading. He operated without a license and collected BD 65,000 from multiple victims.
Charges: Fraud under Penal Code, operating unlicensed financial services.
Outcome: 3 years imprisonment and repayment of BD 65,000 to victims.
Significance: Demonstrates that courts prosecute unlicensed crypto investment schemes as both fraud and regulatory violations.
Case 2 – Money Laundering Using Crypto
Facts: A man received funds from a fraudulent investment network. He purchased USDT (a stablecoin) and transferred it abroad to hide the money’s origin.
Charges: Money laundering under AML law, fraud facilitation.
Outcome: 6 years imprisonment, BD 105,000 fine, and confiscation of all assets linked to the crime.
Significance: Shows Bahrain actively prosecutes laundering of illicit funds through cryptocurrencies.
Case 3 – Large-Scale Investment Fraud (BD 6 Million)
Facts: Owners of a financial company solicited investments, promising returns, but the scheme was fake. Total fraud amounted to BD 6 million.
Charges: Fraud, forgery, embezzlement, money laundering, operating unlicensed investments.
Outcome: Trial ongoing, likely sentences include imprisonment, fines, and restitution to victims.
Significance: Illustrates that high-value financial fraud, including crypto-related investments, is treated seriously.
Case 4 – Multi-Defendant Crypto Laundering Case
Facts: A group collected over BD 10 million from unlicensed investments and converted some funds into cryptocurrencies to conceal origins.
Charges: Fraud, money laundering using digital assets.
Outcome: 6 years imprisonment, BD 10,000 fines, and forfeiture of BD 10 million.
Significance: Demonstrates that digital currency use in laundering elevates criminal liability.
Case 5 – Foreign Nationals Engaged in Online Crypto Fraud
Facts: Three foreign nationals ran an online cryptocurrency investment scheme, deceiving investors into sending funds for “high-return trades.”
Charges: Fraud, money laundering, operating unlicensed investments.
Outcome: Sentences of 5–9 years imprisonment, fines, confiscation of assets, and permanent deportation.
Significance: Highlights strict enforcement against cross-border and foreign perpetrators.
Key Observations
Fraud is punishable regardless of medium. Even if cryptocurrency is used, deception for financial gain is treated as criminal fraud.
Regulatory violations compound penalties. Running unlicensed investment platforms leads to additional fines and imprisonment.
Crypto laundering is a serious offense. Moving money via digital assets to obscure its origin triggers AML violations.
Foreign nationals face deportation after conviction. Bahrain treats cross-border fraud as an aggravating factor.
Courts integrate cybercrime laws. Using digital platforms to commit fraud strengthens prosecution cases.
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