The Bahamas plans to tighten crypto regulations that were tarnished by the collapse of the FTX exchange, which was based on the island nation along with the platform’s fallen founder Sam Bankman-Fried.
(Bloomberg) — The Bahamas plans to tighten crypto regulations that were tarnished by the collapse of the FTX exchange, which was based on the island nation along with the platform’s fallen founder Sam Bankman-Fried.
The Securities Commission of the Bahamas invited feedback on the proposed changes to the Digital Assets and Registered Exchanges Act. Its goals include strengthening financial and reporting requirements for crypto businesses.
The revisions would capture more activities, the agency said in a statement Tuesday. For example, a disclosure regime would apply to staking — the process of pledging coins to help operate blockchains in return for rewards.
Other highlights flagged by the commission included requirements for exchanges, crypto custody, stablecoins and nonfungible tokens that qualify as financial NFTs. Algorithmic stablecoins and privacy tokens would be banned.
The law is being updated in part “in light of lessons learned during the so called ‘crypto winter’ of 2022” as well as from benchmarking against jurisdictions like the European Union, Hong Kong and New York, the securities commission said in a consultation document.
“The bill provides the ability for the commission to prescribe additional activities as digital-asset businesses, as necessary,” the agency said.
The public can provide feedback on the proposed legislation until May 31.
Bankman-Fried had moved to the Bahamas as the nation sought to become a crypto hub. He is now on bail and living with his law professor parents in Palo Alto, California as he awaits trial in the US. He has pleaded not guilty to allegations of a years-long fraud at FTX.
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