The Securities and Exchange Commission of The Bahamas (SCB) published a draft of the Registered Exchanges and Digital Assets Bill (DARE) 2023 on April 25. The sweeping bill will undergo a consultation period with the aim of enacting it by the end of the quarter.
The 2023 bill updates the DARE Act of 2020. Work on the bill began in April 2022, with the Hogan Lovells law firm committed to drafting it. SCB Executive Director Christina Rolle saying:
"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."
Among other things, the bill it expands the scope of regulated business activities to include advice and management of digital assets, derivative services, node services and staking. It sets requirements for exchange systems and controls and regulates custodial wallets and initial token offerings.
The Bahamas Securities and Exchange Commission has issued the Registered Exchanges and Digital Assets Bill of 2023 for public consultation. The consultation period ends on Wednesday, May 31. Information can be found on the Commissions website here >> https://t.co/EvgzMc1OFU pic.twitter.com/AVnhiClhSl
โ Securities and Exchange Commission of the Bahamas (@SCBgov_bs) April 26, 2023
The bill also provides a "first of its kind" disclosure regime for digital asset staking. Terms of the customer contract, details of the stakeout protocolthe assets being wagered, the rewards or penalties a user could earn, and the method of selecting the participants for the wager must be disclosed.
The invoice prohibits the issuance of algorithmic stablecoins and privacy tokens in the country and tap non-fungible tokensliquidity requirements, mining and dispute resolution.
Related: Bahamian regulator denies asking cryptocurrency exchange FTX to hoard new tokens
Bahamas regulation came under international scrutiny after Bahamas-based cryptocurrency exchange FTX filed for bankruptcy in November amid allegations of fraud and corruption. This led to a certain amount of friction between regulators in the Bahamas and the US judicial system, as well as the new FTX management.
Comments on the bill can be made until May 31. The SCB expects the bill to enter into force at the end of the second quarter of this year.
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