Regulation
Bahamas Introduces DARE Bill 2024 to Restore Crypto Hub Status After FTX
The Bahamas Securities Commission has announced the passage of new cryptocurrency legislation nearly two years after the FTX crash.
The Digital Activities and Registered Exchanges Act, 2024 (OSA 2024) aims to provide regulatory clarity for the country’s digital assets sector and consolidate its position as a pro-cryptocurrency hub.
Christina Rolle, executive director of the Securities Commission, said DARE 2024 provides a new standard in digital asset regulation and is a testament to the financial regulator’s commitment to robust risk management. She added:
“We have created a framework that not only focuses on investor protection, but also encourages responsible innovation, positioning The Bahamas at the forefront of digital asset regulation globally.”
The Bahamas have attracted global control following the sudden collapse of the FTX stock exchange, which was based in the country, in 2022. Before the bankruptcy, the company was valued at $32 billion, and now founder and CEO Sam Bankman-Fried jailedalso based in the Bahamas, it was considered the flagship of a booming industry.
At the time, the Caribbean nation faced growing questions about the effectiveness of its cryptocurrency regulations and a decline in the number of cryptocurrency companies expanding into its region.
OSA 2024
DARE 2024 expands the scope of regulated digital asset activities to include advisory and management services. It also regulates digital asset derivatives, staking out services and other activities as the industry evolves.
The law introduces more stringent requirements for digital asset exchanges to ensure strong investor and consumer protection. It also establishes a comprehensive custody framework for digital asset custody and custodial wallet services.
DARE 2024 provides clear definitions and guidelines for staking services and stablecoins. The law details the registration process, asset reserve policies, and custody management for stablecoins.
Additionally, the law requires timely financial disclosure and reporting. It addresses conflicts of interest and relationships with related third parties, and classifies NFTs as financial or consumer assets.
In particular, DARE 2024 prohibits the issuance of algorithms stablecoins and privacy tokens and imposes some restrictions on Proof-of-Work (War possession) token mining activities in the country.