Terms of service

1. Who we are

These terms are between you and Kafil W.L.L., a company registered in the Kingdom of Bahrain and licensed by the Central Bank of Bahrain under a Category 2 Crypto-Asset Services Company Licence, granted under Volume 6 of the CBB Rulebook (Crypto-Asset Module). That licence permits four activities; we carry on one of them, crypto-asset custody. See Regulatory status, which also explains how to verify the licence and why there is no number to quote.

"We", "us" and "Kafil" mean that company. "You" means the person or entity agreeing to these terms.

2. What we do

We act as a neutral third party holding funds while two parties complete a transaction. We hold one of the three signatures required to move those funds. We are engaged by both parties jointly and act for neither against the other.

3. What we are not

We are not a bank and do not accept deposits. We are not an investment service and offer no returns. We are not a party to the underlying transaction between you and your counterparty, and we do not verify the goods, services or assets being exchanged beyond the conditions you record with us. We are not your agent for any purpose beyond the escrow. We do not provide legal, tax or investment advice.

4. Eligibility

You must be at least 18 and have capacity to contract. You must not be a sanctioned person, act for one, or be resident in a restricted jurisdiction. See Restricted Jurisdictions. Companies must evidence their ownership structure and ultimate beneficial ownership.

5. Verification

You and your counterparty must complete identity and source-of-funds verification before we act. See our AML & KYC Policy. We may decline to act, and may terminate, where verification is not completed to our satisfaction. Where the law prohibits disclosure we may be unable to tell you why.

6. Creating a deal

Both parties submit the proposed terms: the asset and amount, the delivery conditions, what constitutes delivery, and the deadline. We record them and issue a reference.

Terms become binding when both parties have accepted the same recorded version. Acceptance by one party alone creates nothing. Until both have accepted, either may withdraw at no cost.

The recorded terms are the sole basis on which a dispute is later decided. Agreements made elsewhere are not part of the deal unless recorded with us.

7. Custody

Funds are held at a 2-of-3 multi-signature address. You hold one key, your counterparty holds one, and we hold one. Any two signatures move the funds. No combination of two signatures can direct funds to us.

The address and its signing policy are disclosed to both parties before funding and are independently verifiable on the relevant public blockchain. On Bitcoin we use a native multi-signature script; on Ethereum a Safe smart account; on Tron the chain's own multi-signature account permissions.

Our key is held offline on dedicated signing hardware and requires two of our personnel to use. Funds are held per deal, never pooled, never lent, never staked.

Loss of keys. If one key is lost, the remaining two complete the deal: on Tron and Ethereum the signer set can be rotated without funds moving; on Bitcoin the remaining keyholders sweep to a new address. If two of the three keys are lost, the funds are permanently unreachable by any party including us, and we accept no liability for that outcome. This is inherent in an arrangement where no single party can move funds alone.

8. Fees

Fees are as published on our Fees page when the deal is created. Later changes to the schedule do not affect existing deals.

The fee is calculated on the deal value, split evenly between the parties by default, and may be reassigned between you by written notice to us before funding.

The fee is earned when the escrow is funded, because that is when verification, screening and setup have been performed. If a funded deal later collapses the fee is not refunded and is borne by the buyer. If a deal is abandoned before funding, no fee is charged.

Network fees, bank charges, external arbitration costs, enhanced due diligence and post-funding amendments are not included. See the Fees page.

9. Release and return

Release. On the buyer's approval, funds are released to the seller.

Return. The seller may return funds to the buyer at any time without the buyer's approval. Both parties acting together may cancel and return funds at any time before release.

Deadline. Where the agreed deadline passes without delivery being confirmed, either party may open a dispute. Passing the deadline does not itself release or return funds.

Non-response. Where one party becomes unresponsive, the other may open a dispute after the deadline. Funds are never released on silence alone.

10. Disputes between the parties

Handled under our Complaints & Disputes process, on the timetable published there.

Our decision is binding as to the release of the escrowed funds. It determines where the money goes and nothing more. It does not determine the parties' wider rights against each other, and does not prevent either party pursuing the other for breach of the underlying contract in any forum otherwise available.

11. Your obligations

Give accurate information and update it if it changes. Verify the escrow address through a channel you initiated before sending funds. Keep your key secure and do not share it, including with us. Do not use the service for any unlawful purpose. Tell us if your jurisdiction or circumstances change during a live deal.

12. Our liability

Nothing in these terms excludes or limits our liability for fraud, for wilful misconduct, for gross negligence, or for any harmful act giving rise to liability in tort. Under Bahraini law an agreement purporting to exempt a party from liability for a wrongful or harmful act is void, and we do not attempt one. If you are ever told that a clause in these terms prevents you pursuing us for something in that list, that is wrong.

Subject to that, we are not liable for: the conduct, solvency or performance of your counterparty; the quality, existence or title of anything being exchanged; movements in the value of any asset; network-level events including congestion, forks, halts and chain reorganisations; defects in third-party smart contract code; losses arising from your own error in sending funds, including to an address you did not verify; losses arising from your failure to secure your key; and the permanent loss of funds where two of the three keys are lost.

Our aggregate liability in contract in respect of any deal is limited to the fee we charged for that deal. Article 225 of the Bahrain Civil Code (Legislative Decree No. 19 of 2001) permits parties to agree the measure of compensation in advance, and this clause is agreed on that basis. It applies to our contractual liability only; it does not touch the carve-outs in the first paragraph, and a Bahraini court retains its power to review an agreed measure of compensation.

We do not accept liability for indirect or consequential loss, or for loss of profit, business or opportunity.

Why the cap is the fee and not the deal value. We are paid a fee measured in hundreds or low thousands of dollars to hold a deal that may be worth a great deal more. An escrow agent who bore the full deal value on every transaction would have to price for that, and the price would be indistinguishable from insurance we have told you elsewhere we cannot buy. We would rather state the limit plainly than bury an uncapped promise we could not honour. What actually protects the money is clause 7: we cannot move it alone.

13. Suspension and termination

We may decline any deal. We may suspend or terminate where verification fails, screening fails, we suspect unlawful purpose, or we are legally required to.

Funds already in escrow are not ours and do not form part of our assets. Two things secure that, and they do not depend on each other.

As a matter of law. Client crypto-assets are segregated from our own under the client-asset rules the CBB's Crypto-Asset Module imports from its Market Intermediaries and Representatives module. They are held for you, are not available to our creditors, and do not fall into any estate distributable among them. As a CBB licensee we also sit outside the ordinary Reorganisation and Bankruptcy Law No. 22 of 2018. Insolvency of a licensee is dealt with under the Central Bank of Bahrain and Financial Institutions Law of 2006, under the CBB's supervision rather than by a general bankruptcy trustee.

As a matter of arithmetic. Funds remain at their escrow address and remain movable by you and your counterparty together, with two of three signatures. That is true whatever any court or administrator later decides. Where we can lawfully do so we will co-sign to return funds to the buyer; where we cannot, because we are legally restrained, wound up, or simply gone, the two of you retain the signatures needed to act without us.

Notice. Except where we are legally prevented from doing so, or where a deal must be suspended immediately for screening or legal reasons, we will give you 30 days' written notice before terminating our service to you, and we will not begin an orderly wind-down of the business without giving clients 60 days' notice and a route to close out live deals. Suspension of an individual deal under this clause takes effect at once and is notified at the time.

14. Intellectual property

The site, its content and the Kafil name and marks remain ours. You may not copy or reuse them beyond ordinary use of the service.

15. Changes to these terms

We publish changes here with an updated date. The terms applicable to a deal are those in force when it was created. A later change cannot alter a live deal. Material changes are notified to active clients directly.

16. Governing law and jurisdiction

These terms are governed by the laws of the Kingdom of Bahrain.

Disputes between you and us are escalated as set out on our Complaints & Disputes page: internal appeal first, then, depending on the amount, expert determination, the Bahrain Chamber for Dispute Resolution, or arbitration under the SIAC Streamlined Procedure.

The arbitration agreement. Where a dispute proceeds to arbitration under this clause:

• Seat: the Kingdom of Bahrain, in every tier. A single seat keeps one supervisory court over the whole ladder; splitting the seat by value is how a tiered clause becomes unenforceable.
• Rules: the BCDR Arbitration Rules 2022 (in force 1 October 2022) for disputes referred to the Bahrain Chamber for Dispute Resolution; the SIAC Rules, Streamlined Procedure for disputes above US $100,000.
• Number of arbitrators: one. Under the BCDR Rules a sole arbitrator is appointed by default where the parties have not agreed otherwise, and we do not agree otherwise. Three arbitrators on a dispute of this size would cost more than the dispute.
• Language: English. The BCDR Rules are equally authoritative in Arabic, English and French, and either party may file and give evidence in Arabic, with translation at the expense of the party relying on the document.
• Election: the tier is fixed by the amount in dispute at the date the arbitration is commenced. Where a party disputes which tier applies, the arbitral institution's determination governs.

Escalation is a condition precedent to arbitration, not to your access to a court. Nothing in this clause prevents either party seeking urgent injunctive or protective relief from a competent court at any time, and nothing in it displaces any right you have under applicable consumer protection law that cannot be contracted out of.

This clause and clause 12 are the two that determine what actually happens if something goes wrong, which is why they are written out rather than gestured at.

17. Contact

Details at the foot of this page.