The Securities Commission of the Bahamas (SCB) published a draft of the Digital Assets and Registered Exchange (DARE) Bill of 2023 on April 25. The comprehensive bill will be negotiated with the aim of enacting it by the end of the quarter.
The 2023 Act updates the 2020 DARE Act. Work on the bill began in April 2022, with law firm Hogan Lovells participating in the drafting. SCB Executive Director Christina Rolle said: "Once passed, DARE 2023 will be one of the most progressive digital asset legislation in the world and will align with the Bahamas' commitment to fostering growth and innovation in a well-regulated environment."
Among other things, the bill expands the scope of regulated business activities to include digital asset advisory and management, derivative services, node services, and staking. It sets requirements for the exchange's systems and controls and regulates custodial wallets and init ial coin offerings.
The bill also provides a “first-of-its-kind” disclosure regime for digital asset staking. The terms of the customer agreement, the details of the staking agreement, the assets staked, the rewards or penalties users may receive, and the method of selecting staking participants must all be made public. The bill prohibits the issuance of algorithmic stablecoins and privacy coins in the country, and addresses non-fungible tokens, liquidity requirements, mining and conflict resolution.
Regulation in the Bahamas has come under international scrutiny after Bahamas-based cryptocurrency exchange FTX went bankrupt in November amid fraud and corruption allegations. This has led to a degree of friction between Bahamian regulators and the US court system, as Well as the new FTX management Comments on the bill are available until May 31. Standard Chartered hopes the bill will come into force by the end of the second quarter of this year.
