The Bahamas Securities Commission recently made an announcement regarding the passage of new crypto legislation, known as the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024). This move comes nearly two years after the collapse of FTX, a major crypto exchange. The goal of DARE 2024 is to bring regulatory clarity to the digital assets industry in the Bahamas and reaffirm its status as a crypto-friendly destination.
Christina Rolle, the executive director of the Securities Commission, emphasized that DARE 2024 sets a new standard for digital asset regulation. The focus is not only on investor protection but also on promoting responsible innovation. By providing a framework that encourages innovation, the Bahamas aims to position itself at the forefront of digital asset regulation globally.
Following the collapse of FTX in 2022, the Bahamas faced significant scrutiny and questions about the effectiveness of its crypto regulations. The country, once seen as a hub for crypto companies, experienced a decline in interest from the industry. The imprisonment of FTX’s founder and CEO, Sam Bankman-Fried, added to the challenges faced by the Caribbean nation.
DARE 2024 expands the range of activities that fall under regulated digital assets. This includes advisory and management services, as well as the regulation of derivatives and staking services. The legislation also introduces stricter requirements for digital asset exchanges to ensure the protection of investors and consumers. Additionally, DARE 2024 establishes a comprehensive framework for digital asset custody and custodial wallet services.
Key Provisions of DARE 2024
The new law provides clear definitions and guidelines for staking services and stablecoins. It outlines the registration process, asset reserve policies, and custody management for stablecoins. DARE 2024 also mandates timely disclosure and financial reporting, addressing conflicts of interest and relationships with third parties. The legislation categorizes NFTs as financial or consumer assets and places restrictions on certain activities, such as the issuance of algorithmic stablecoins and privacy tokens.
The Bahamas’ introduction of DARE 2024 marks a significant step towards revitalizing its digital assets industry. By setting higher regulatory standards and fostering innovation, the country aims to attract more crypto businesses and regain its position as a leading crypto hub.