Bahamas Seeks to Tighten Its Crypto Laws Following FTX Collapse

The Bahamas is seeking to tighten its crypto laws in the wake of the collapse of FTX, the crypto exchange largely based in the Caribbean nation, according to a consultation document published Tuesday.

The new bill, which includes measures on stablecoins, proof-of-work mining and crypto staking, could become “among the most advanced pieces of digital asset-legislation in the world,” said Christina Rolle, executive director of the Securities Commission of the Bahamas (SCB) in a statement.

Bahamas, which already passed the Digital Assets and Registered Exchanges Act, DARE, in 2020, was home to Sam Bankman-Fried and his crypto exchange FTX, which collapsed in November 2022.

Since then, Bankman-Fried has been accused of siphoning off corporate funds to spend on luxury villas, pleading not guilty to fraud charges brought by the U.S. Department of Justice. FTX’s new management has blasted poor governance under his tenure, and are also involved in a protracted meşru dispute with the Bahamas over jurisdiction.

Under the new law, “operators of a digital asset exchange must ensure the systems and controls used in its activities are adequate and appropriate for the scale and nature of its business,” the document said.

It will also bring in a “new and comprehensive regulatory framework for stablecoins” which seek to fix their value to other assets such as fiat currency, after the dramatic collapse of terraUSD last year, and extend to cover crypto services such as advice, derivatives, and crypto staking, and also include non-fungible tokens (NFTs) that are classed as financial assets.

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Edited by Sandali Handagama.

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