The Bahamas Securities Commission recently announced the passage of the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) in an effort to provide regulatory clarity for the country’s digital assets industry. This move comes nearly two years after the collapse of FTX, a major exchange headquartered in the Bahamas. The collapse of FTX in 2022 raised questions about the effectiveness of the country’s crypto regulations and its attractiveness to crypto businesses.
The DARE 2024 legislation aims to broaden the scope of regulated digital asset activities in The Bahamas. It now includes advisory and management services, digital asset derivatives, staking services, and other evolving activities in the industry. The law introduces stricter requirements for digital asset exchanges to ensure investor and consumer protection. Additionally, it establishes a comprehensive custody framework for digital asset custody services, as well as clear guidelines for staking services and stablecoins.
One of the key features of DARE 2024 is the emphasis on investor protection and responsible innovation. The law focuses on creating a framework that not only safeguards investors but also encourages innovation in the digital assets industry. By doing so, The Bahamas aims to position itself as a leader in digital asset regulation at a global level.
Furthermore, DARE 2024 provides clear definitions and guidelines for various aspects of the industry, including staking services, stablecoins, and NFTs. The law outlines the registration process, asset reserve policies, custody management, and timely disclosure requirements for stablecoins. It also addresses conflicts of interest, relationships with third parties, and categorizes NFTs as financial or consumer assets. Additionally, the legislation prohibits the issuance of algorithmic stablecoins and privacy tokens, as well as imposes restrictions on Proof-of-Work (PoW) token mining activities in the country.
The introduction of DARE 2024 by the Bahamas Securities Commission marks a significant step towards reinforcing the country’s position as a pro-crypto hub. The legislation aims to provide regulatory clarity, ensure investor protection, and promote responsible innovation in the digital assets industry. As The Bahamas continues to evolve its crypto regulations, it is positioning itself as a key player in the global digital asset landscape.
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