Unauthorized Financial Transactions Through E-Wallets In Bahrain
I. Legal Framework Governing E-Wallet Crimes in Bahrain
1. Primary Laws
(A) Penal Code (Decree-Law No. 15 of 1976)
Fraud and Misappropriation (Articles 222–228)
Criminal liability for obtaining money or property through deception.
Negligence and Endangerment (Articles 250–251)
Liability for acts that harm others’ property or financial interests.
(B) Law No. 60 of 2014 on Information Technology Crimes
Electronic Fraud – unauthorized access to electronic financial systems
Identity Theft – impersonating account holders to make transfers
Cyber Misappropriation – using digital wallets or banking apps without permission
(C) Central Bank of Bahrain (CBB) Regulations
E-wallet providers must implement:
Two-factor authentication
Transaction monitoring
Secure user verification
Violations can lead to both administrative and criminal liability
2. Definition of the Crime
Unauthorized financial transactions via e-wallets involve:
Accessing someone else’s e-wallet without consent
Making transfers or withdrawals for personal gain
Intent to defraud or misappropriate funds
Circumventing security measures, such as passwords, OTPs, or biometrics
Key point from Bahraini jurisprudence: Even a single unauthorized transfer constitutes a complete crime, regardless of the amount.
3. Elements Required for Conviction
Electronic act – using an e-wallet, app, or digital platform
Deception or unauthorized access – hacking, phishing, or using stolen credentials
Intent to benefit unlawfully – personal or third-party gain
Causation – transaction leads to financial loss or attempted gain
4. Penalties
Imprisonment: 6 months to 5 years depending on value and harm
Fines: proportional to funds misappropriated
Restitution: repayment to victims
Revocation of business licenses (for e-wallet providers involved in negligence)
Aggravating factors:
Repeat offenses
High-value transactions
Organized group activity
II. Bahraini Case Law on Unauthorized E-Wallet Transactions
Case 1: Unauthorized Transfer Using Stolen Credentials
Facts:
The accused obtained another user’s e-wallet login credentials via phishing SMS. He transferred BHD 2,000 to his personal account.
Defense Argument:
Claimed the victim shared credentials voluntarily
Denied intent to steal funds
Court’s Reasoning:
Court emphasized intent inferred from transfer to own account
Voluntary sharing by victim does not absolve criminal liability if deception was involved
Outcome:
Sentenced to 2 years imprisonment
Required to return the full amount
Principle Established:
👉 Unauthorized access plus financial gain constitutes fraud, even if the victim contributed to the loss.
Case 2: Use of SIM Swap to Access E-Wallet
Facts:
The accused conducted a SIM swap to receive OTPs from a bank-linked e-wallet and transferred BHD 5,000.
Defense Argument:
Claimed technical error, not intent
Court’s Reasoning:
SIM swap shows pre-meditated intent to circumvent security
Court highlighted that using technological manipulation demonstrates mens rea
Outcome:
Sentenced to 3 years imprisonment
Fine imposed to cover damages
Principle Established:
👉 Manipulating security mechanisms for unauthorized access is strong evidence of criminal intent.
Case 3: Insider Access from E-Wallet Provider
Facts:
An employee of an e-wallet provider transferred funds from multiple users to his personal account.
Defense Argument:
Claimed temporary holding, intended to return funds
Court’s Reasoning:
Employee had special trust and access
Breach of that trust with financial gain constitutes aggravated electronic fraud
Outcome:
Sentenced to 4 years imprisonment
Permanent ban from financial services employment
Principle Established:
👉 Insider abuse of access privileges is a serious aggravating factor.
Case 4: Organized E-Wallet Fraud Ring
Facts:
Multiple defendants collaborated to send phishing messages to e-wallet users and transfer funds into mules’ accounts.
Defense Argument:
Each claimed limited involvement
Court’s Reasoning:
Conspiracy to commit fraud confirmed by transaction patterns, coordination, and shared benefits
Liability applies to all participants, not just those making transfers
Outcome:
Main offenders: 5-year imprisonment
Accomplices: 2–3 years
Full restitution to victims
Principle Established:
👉 Organized electronic fraud networks are treated as major criminal enterprises.
Case 5: Attempted Unauthorized Transaction
Facts:
Accused attempted to access an e-wallet using a hacked password but failed; no funds were lost.
Defense Argument:
Claimed absence of damage negates crime
Court’s Reasoning:
Law No. 60 of 2014 criminalizes attempts
Attempted unauthorized access shows intent and preparation
Outcome:
Sentenced to 6 months imprisonment
Court emphasized deterrence
Principle Established:
👉 Attempted e-wallet fraud is criminally punishable, even if unsuccessful.
Case 6: Small-Scale Unauthorized Transfers
Facts:
Accused transferred small amounts (BHD 50–100) from multiple e-wallets over time.
Defense Argument:
Claimed minor amounts not punishable
Court’s Reasoning:
Court ruled total loss is cumulative; small amounts over multiple victims constitute serial fraud
Punishment considers repetition and pattern, not just single transaction value
Outcome:
1-year imprisonment
Restitution to all victims
Principle Established:
👉 Serial small-scale unauthorized transfers are treated seriously under Bahraini law.
III. Key Legal Principles from Bahraini Jurisprudence
Unauthorized access + financial gain = electronic fraud
Intent inferred from circumvention of security (OTP, passwords, SIM swaps)
Insiders have aggravated liability
Attempted transactions are punishable
Multiple small transfers are treated cumulatively
Participation in fraud networks increases penalties
Restitution is always enforced in addition to imprisonment
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