After the collapse of the FTX exchange nearly two years ago, The Bahamas has faced increased scrutiny over its crypto regulations. The country, once seen as a pro-crypto hub, saw a decline in the number of crypto companies operating in its region. The new Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) aims to address these issues and provide regulatory clarity in the digital assets industry.
Christina Rolle, the executive director of the Bahamas Securities Commission, emphasized that DARE 2024 sets a new standard in digital asset regulation. The legislation focuses on investor protection while also promoting responsible innovation. This move positions The Bahamas as a leader in digital asset regulation on a global scale.
DARE 2024 expands the scope of regulated digital asset activities to include advisory and management services. It also covers digital asset derivatives, staking services, and other emerging activities in the industry. The legislation introduces stricter requirements for digital asset exchanges to ensure the protection of investors and consumers. Additionally, it establishes a comprehensive framework for digital asset custody and custodial wallet services.
DARE 2024 provides clear definitions and guidelines for staking services and stablecoins. It outlines the registration process, asset reserve policies, and custody management for stablecoins. The legislation also mandates timely disclosure and financial reporting, addresses conflicts of interest, and categorizes NFTs as financial or consumer assets. Furthermore, the law prohibits algorithmic stablecoins and privacy tokens, and imposes restrictions on Proof-of-Work token mining activities.
Overall, the introduction of DARE 2024 demonstrates The Bahamas’ commitment to strengthening its regulatory framework in the digital assets industry. By addressing the loopholes that led to the collapse of FTX and enhancing investor protection measures, the country aims to regain its status as a leading jurisdiction for crypto businesses. The legislation not only sets a new standard in digital asset regulation but also paves the way for responsible innovation and growth in the industry.
