The Bahamas ‘Dares’ Again 1.5 Years After FTX Collapse, Brings in New Crypto Law

The Parliament of the Bahamas has passed the Digital Assets and Registered Exchanges Act, 2024 or DARE 2024.

The law is the result of the island nation’s effort to tighten its cryptocurrency laws following the collapse of Bahamas-based FTX in November 2022.

The Bahamas Parliament, where bankrupt cryptocurrency exchange FTX is headquartered, has passed new cryptocurrency legislation, the Bahamas Securities Commission announced on Tuesday.

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

“Building on the foundations laid by the DARE Act of 2020, the legislation introduces comprehensive reforms designed to address the changing landscape of digital asset 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 stringent systems and control requirements,” the announcement said.

The law also introduces new disclosure and financial reporting requirements, expands custody services, and creates a comprehensive stablecoin framework, but bans algorithmic stablecoins.

Following the collapse of FTX in November 2022, the Bahamas has expressed a desire to tighten crypto laws as it grapples with a crisis of confidence and a referendum regarding its credibility as a financial services hub.

“The DARE Act will include, among other things, measures to clarify the regulation of stablecoins and the introduction of stronger investor and consumer protection mechanisms,” Prime Minister Davis said at a conference in October of last year.

“This 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.”

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