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

The parliament of the Bahamas, where bankrupt cryptocurrency exchange FTX was headquartered, has passed a new crypto law, The Securities Commission of The Bahamas announced on Tuesday.

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

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

DARE 2024 “encompasses a wider range of digital asset activities, including advisory or management services, digital asset derivatives and staking services. Digital asset exchanges must adhere to increased investor and consumer protection requirements including stringent systems and controls requirements,” the announcement said.

The law also introduces new disclosure and financial reporting requirements, brings custody services under its fold and a comprehensive stablecoin framework, while prohibiting algorithmic stablecoins.

After FTX’s collapse in Nov. 2022, The Bahamas stated a desire to tighten its crypto laws as it fought a crisis of confidence and a referendum on its credibility as a hub for financial services.

In October last year, during a conference, PM Davis said the “DARE Act will include – among other things – measures to clarify the regulation of stablecoins, and the introduction of more robust investor and consumer protection mechanisms,” among other changes.

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

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