After the FTX scandal concentrated the international spotlight on it, the Securities Commission of The Bahamas completes its regulator overhaul.
The Securities Commission of The Bahamas (SCB) issued a draft of the Digital Assets and Registered Exchanges (DARE) Bill 2023 on April 25. The sweeping bill will undergo a discussion period with the goal of making it by the end of the quarter.
The 2023 bill updates the DARE Act of 2020. Work on the bill embarked on in April 2022, with the Hogan Lovells law enterprise engaged to draft it. SCB Executive Director Christina Rolle spoke:
“Once passed, DARE 2023 will be among the most advanced pieces of digital asset-legislation in the world and will align with The Bahamas’ commitment to facilitating development and innovation in a well-regulated environment.”
Among different things, the bill expands the scope of regulated business conditioning to include digital asset advising and management, derivative services, node services, and staking. It sets necessities for exchanges ’ systems and controls and regulates custodial wallets and initial token offerings.
The bill similarly provides a “first-of-its-kind” exposure regime for digital asset staking. Terms of the customer agreement, particulars of the staking protocol, the assets being staked, the rewards or penalties a user might earn, and the method for selecting staking participants must all be disclosed.
The bill bans the allocation of algorithmic stablecoins and privacy tokens in the country and touches on nonfungible tokens, liquidity necessities, mining, and conflict resolution.
Related: Bahamas regulator denies asking crypto exchange FTX to mint new tokens
Bahamian regulation was subject to international scrutiny after the Bahamas-based cryptocurrency exchange FTX went bankrupt in November amid accusations of scam and corruption. This led to a certain quantum of friction between Bahamian regulators and the United States court network as well as the new FTX operation.
Comments on the bill can be framed through May 31. The SCB hopes the bill will near into force by the end of the alternate quarter this year.
(DEREK ANDERSEN, Cointelegraph, 2023)