The Bahamas Introduces Transformative Digital Asset Legislation: The DARE Act 2024
30 Julio 2024 - 4:33PM
Business Wire
The Bahamas Leads with DARE Act 2024
The Securities Commission of The Bahamas (the Securities
Commission) today announced the Digital Assets and Registered
Exchanges Act, 2024 (DARE 2024) has been passed into law by
the Parliament of The Bahamas, in a pacesetting move that
solidifies the country’s position as a leader in digital asset
regulation. 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.
“DARE 2024 represents a new standard in digital asset regulation
and 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,
positioning The Bahamas at the forefront of digital asset
regulation globally.”
The Securities Commission took a proactive approach with DARE
2024, ensuring its alignment with current international best
practices and the recommendations of standard-setting bodies,
including the International Organization of Securities Commissions’
standards for regulators regarding crypto and digital assets and
the Financial Action Task Force Recommendations. The new
legislation is also the product of focused benchmarking of global
legislative and regulatory advances, evolution of emerging risks,
and extensive stakeholder and industry consultation.
Key highlights of DARE 2024 include:
- Expanded Scope: The law now encompasses a wider range of
digital asset activities, including advisory or management
services, digital asset derivatives and staking services. The
Securities Commission also has the flexibility to add additional
activities as the space evolves.
- Enhanced Digital Asset Exchange Requirements: Digital
asset exchanges must adhere to increased investor and consumer
protection requirements including stringent systems and controls
requirements, which enhance the integrity and security of
transactions.
- Robust Custody Framework: New provisions bring custody
of digital assets or custodial wallet services under DARE 2024 and
enhance the protection of client interests by requiring
accessibility of digital assets, among other provisions.
- Staking Framework: DARE 2024 introduces a
first-of-its-kind disclosure regime for staking digital assets
belonging to clients or the operation or management of a staking
pool as a business.
- Comprehensive Stablecoin Framework: The Act provides a
clear definition for stablecoins, provides for the registration of
existing stablecoins, specifies acceptable forms of reserve assets
and establishes new requirements for custody and management,
segregation, reporting and redemption of reserve assets. The
issuance of algorithmic stablecoins is expressly prohibited.
- Digital Asset Issuers: Investor protection measures are
enhanced by the inclusion of fit and proper standards for digital
asset issuers, in addition to new disclosure and financial
reporting requirements.
Among the other notable provisions of DARE 2024 are robust
standards addressing conflicts of interest and connected
third-party relations. The new legislation also addresses the
categorization of non-fungible tokens as either financial or
consumer assets, provides for liquidity and reporting requirements,
prohibits privacy token issuance and introduces certain
restrictions on proof-of-work mining.
The implementation of DARE 2024 is expected to maintain a
competitive, robust and pragmatic regulatory framework for new
fintech entrepreneurs and established digital asset businesses in
The Bahamas, further strengthening the country’s position as a
leading international financial centre. The new legislation
represents a commitment to continue evolving the regulatory
framework, offering enhanced protections for consumers and
investors.
The Securities Industry Act 2024 was passed into law in The
Bahamas simultaneously, with DARE 2024, updating the regulatory
regime for the securities industry to ensure a robust and agile
framework that remains compliant with global standards and
international best practices.
For more information about DARE 2024 and its implications for
the digital asset industry in The Bahamas, or the Securities
Industry Act 2024, please visit: https://www.scb.gov.bs/.
Editor’s Information:
- More information about the Digital Assets and Registered
Exchanges Act, 2024 can be found on the Commission’s website
(www.scb.gov.bs/dare-act-2024-information/).
- The Securities Industry Act, 2024 can be found on the
Commission’s website
(www.scb.gov.bs/legislative-framework/acts-and-regulations/).
- In addition to the SIA and DARE Act, the Commission administers
the Investment Funds Act, 2019, the Financial and Corporate Service
Providers Act, 2020 and the Carbon Credit Trading Act, 2022.
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Shari Smith Vice President, Burson
shari.smith@bursonglobal.com