SCB Executive Director claims the bill will be "among the most advanced pieces of digital asset legislation in the world."
The Securities Commission of The Bahamas (SCB) released the Digital Assets and Registered Exchanges (DARE) Bill 2023 draft on April 25th.
This comprehensive draft is an updated version of the 2020 DARE Act. It is worth noting that the work on the current bill started a year ago, on April 2022.
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When asked about the bill, Christina Rolle, SCB Executive Director, noted:
Once passed, DARE 2023 will be among the most advanced pieces of digital asset-legislation in the world and will align with The Bahamas’ commitment to facilitating development and innovation in a well-regulated environment.
Before coming into force, the legislation is set to undergo a consultation period, which is available until May 31st.
The bill aims to broaden the scope of regulated business activities by encompassing digital asset advising and management, derivative services, node services, and staking. Furthermore, it establishes guidelines for crypto exchanges' systems and controls, as well as regulations for custodial wallets and initial token offerings.
In a groundbreaking move, the bill introduces a "first-of-its-kind" disclosure regime for crypto staking. This requires the disclosure of client agreement terms, staking protocol details, staked assets, potential rewards or penalties, and the selection process for staking participants.
However, despite all advantages, the bill prohibits the issuance of algorithmic stablecoins and privacy tokens within the country while addressing non-fungible tokens (NFTs), liquidity requirements, mining, and conflict resolution.
The SCB's regulatory approach gained international attention when the Bahamas-based cryptocurrency exchange FTX went bankrupt in November following allegations of fraud and corruption, causing tensions between Bahamian regulators, the United States court system, and FTX's new management.
Based on the reports, the SCB aims to enforce the legislation by the end of the second quarter of 2023.
The proposed legislation demonstrates the Bahamas' commitment to being at the forefront of digital asset regulation and fostering innovation in a well-regulated environment.
