The Bahamas Securities Commission recently announced the passing of the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) with the aim of providing regulatory clarity for the country’s digital assets industry. This legislation comes nearly two years after the collapse of FTX, the exchange that was headquartered in the Bahamas in 2022. The goal of DARE 2024 is to re-solidify the country’s position as a pro-crypto hub and address the issues that arose following the FTX collapse.
Christina Rolle, the executive director of the Securities Commission, highlighted that DARE 2024 sets a new standard in digital asset regulation. The framework not only focuses on investor protection but also encourages responsible innovation within the industry. This positions The Bahamas at the forefront of digital asset regulation on a global scale. The legislation aims to provide a comprehensive regulatory framework that addresses various aspects of the digital assets market.
DARE 2024 broadens the scope of regulated digital asset activities to include advisory and management services, digital asset derivatives, staking services, and more. The law introduces stricter requirements for digital asset exchanges to ensure robust investor and consumer protection. It also establishes guidelines for custody management and custodial wallet services. These measures are put in place to prevent future incidents similar to the collapse of FTX from occurring.
The legislation provides clear definitions and guidelines for staking services, stablecoins, and NFTs. It outlines the registration process, asset reserve policies, and custody management for stablecoins. Additionally, DARE 2024 mandates timely disclosure and financial reporting to ensure transparency within the digital assets market. Notably, the law prohibits the issuance of algorithmic stablecoins and privacy tokens and imposes restrictions on Proof-of-Work (PoW) token mining activities in the country.
The introduction of DARE 2024 marks a significant step towards enhancing regulatory clarity and investor protection in The Bahamas’ digital assets industry. By implementing stricter regulations and guidelines, the country aims to attract more crypto companies while ensuring the stability and security of the market. This legislation sets a new standard for digital asset regulation globally and positions The Bahamas as a leader in the industry.