Bahamas Introduces New Crypto Law 1.5 Years After FTX Crash

The Bahamas Securities Commission has announced that the Bahamas parliament, home to the headquarters of failed cryptocurrency exchange FTX, has passed a new crypto law.

The Digital Assets and Registered Exchanges Act 2024, or DARE 2024 for short, was promised in November 2022 following the collapse of FTX, a year after the island nation’s Prime Minister Philip Davis cut the ribbon with FTX founder Sam Bankman-Fried to officially open the FTX office.

“Building on the foundation laid by the DARE Act of 2020, the legislation introduces comprehensive reforms designed to address the evolving world of digital assets and cryptocurrency markets,” the regulator said.

DARE 2024 “covers a broader range of digital asset activities, including advisory or management services, digital asset derivatives, and staking services. Digital asset exchanges must comply with increased investor and consumer protection requirements, including rigorous regulatory and control requirements,” it said.

The law also introduces new disclosure and financial reporting requirements, provides a comprehensive legal framework for custody services and stablecoins, and bans algorithmic stablecoins.

Following the collapse of FTX in November 2022, the Bahamas has expressed a desire to enforce crypto laws even stricter as it grapples with a crisis of trust and a referendum on its credibility as a financial services hub.

“This development is a testament to our commitment to sound risk management,” said Christina Rolle, executive director of the Securities and Exchange Commission. “We have created a framework that not only focuses on investor protection but also encourages responsible innovation.”