The archive · Money & Fintech · Strategic decision · 2017–2024
Rain's regulated-crypto bet: Bahrain's first license, $110M round, then a $14.8M exploit
Rain bet a licensed exchange could win the Gulf's crypto trust first; CBB license in 2019, $110M Series B, ADGM license, then a 2024 exploit.
Rain
What the business is
Rain is a Bahrain-based cryptocurrency exchange and custodian where users buy, sell and store crypto under Central Bank of Bahrain and Abu Dhabi Global Market regulation.
Starting capital：$116M disclosed: $6M Series A (Jan 2021, led by MEVP with Coinbase Ventures) and $110M Series B (Jan 2022, co-led by Paradigm and Kleiner Perkins, with Coinbase Ventures, Global Founders Capital, MEVP, Cadenza, JIMCO and CMT Digital).
How it started
Founded in 2017 by Abdullah Almoaiqel, AJ Nelson, Joseph Dallago and Yehia Badawy, Rain bet that Gulf users were holding back from crypto for lack of a trusted, regulated on-ramp. It spent its early years securing the Central Bank of Bahrain's Crypto-Asset Module license—granted in 2019—before scaling trading.
What happened
The regulatory-first strategy attracted capital and users: a $6M Series A in Jan 2021 led by MEVP with Coinbase Ventures, then a $110M Series B in Jan 2022 co-led by Paradigm and Kleiner Perkins. By then Rain had processed $1.9B in transactions, counted 185,000+ active users and employed about 400 people. In 2023 it won an ADGM financial-services permission to offer crypto brokerage and custody in the UAE.
How it ended up
Still running after a crisis: on April 29, 2024, Rain's BTC, ETH, SOL and XRP wallets saw suspicious outflows of about $14.8M. The exchange said it isolated the issue, kept customer funds at a 1:1 ratio, had Rain Group cover potential losses, and continued operations in full.
Background
Rain was founded in 2017 in Bahrain by Abdullah Almoaiqel, AJ Nelson, Joseph Dallago and Yehia Badawy on the bet that Gulf users wanted crypto but needed a trusted, regulated venue. Instead of launching in a regulatory grey zone, Rain spent its early years securing the Central Bank of Bahrain's Crypto-Asset Module license—granted in 2019, making it the Middle East's first licensed crypto-asset services provider.
The strategy worked as a fundraising story: a $6M Series A in January 2021 led by MEVP with Coinbase Ventures, then a $110M Series B in January 2022 co-led by Paradigm and Kleiner Perkins with participation from Coinbase Ventures, Global Founders Capital, MEVP, Cadenza, JIMCO and CMT Digital. At that point Rain had processed $1.9B in transactions, passed 185,000 active users and employed roughly 400 people.
The regulatory moat widened in 2023, when Rain's Abu Dhabi entity obtained an ADGM financial-services permission to offer virtual-asset brokerage and custody in the UAE. That expansion put the exchange under two of the region's strictest crypto regulators.
The model was stress-tested in April 2024, when on-chain investigator ZachXBT reported suspicious outflows of about $14.8M from Rain's BTC, ETH, SOL and XRP wallets on April 29. Rain responded that it had isolated the issue, that customer funds were held at a 1:1 ratio, that Rain Group covered potential losses, and that operations continued in full.
What has to be true
- Dated, verifiable milestones: CBB license 2019, $6M Series A 2021, $110M Series B Jan 2022, ADGM permission 2023, exploit April 2024.
- A clear falsifiable bet—regulation-first trust in a famously grey market—tested through both fundraising and crisis.
- Hard numbers from press: $1.9B in transactions, 185,000+ active users, ~400 employees, $14.8M exploit.
- Fills the Gulf crypto/regulatory slot with a still-operating company rather than a shutdown story.
- Two independent news sources plus Rain's own license page, all opened and verified.
What can be applied
Regulatory first-mover advantage only pays if the trust it builds survives an operational crisis; transparently covering losses let Rain keep trading after its exploit.
Aftermath
As of May 2024, Rain remained operational under its Central Bank of Bahrain Category 3 crypto-asset license and its 2023 ADGM permission; the company said Rain Group absorbed the roughly $14.8M exploit loss and customer funds were unaffected at a 1:1 ratio. Rain continued to position itself as the GCC's regulated crypto platform, holding licenses in both Bahrain and the UAE while the regional crypto market matured.
Sources
- Rain raises $110 million in Series B funding co-led by Paradigm and Kleiner Perkins
- Crypto exchange Rain 'likely exploited' for $14.8 million: ZachXBT
- ZachXBT Suggests $14.8 Million Hack of Bitcoin Exchange Rain
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