Bill To Regulate Cryptocurrency Drafted In Bahamas

Bill To Regulate Cryptocurrency Drafted In Bahamas

May 28, 2019

The Bahamas securities watchdog has drafted a regulatory framework for the issuance and sale of cryptocurrency, and for its sellers and intermediary service providers in the Caribbean archipelago.

The Securities Commission of the Bahamas released the draft Digital Assets and Registered Exchanges Bill, or DARE Bill 2019, for industry and public consultation. The SCB will listen to the public’s views and opinions on the draft bill until May 28.

The Bill proposes a legislative structure that stipulates standards for entry into and participation in the digital token space. The draft law defines who are eligible to participate, the level of capital required, the rules for reporting and seeking the Commission’s approval, and the penalties for failure to comply with the rules.

Also, the proposed legislation requires that participants adhere to established anti-money laundering (AML) and counter-financing of terrorism (CFT) laws, ensure data protection measures related to the personal information of clients, and implement measures to protect clients’ crypto assets.

SCB Chairman Robert Lotmore said the draft legislation is the first of a series that aims to establish a comprehensive approach to crypto assets regulation in the Bahamas.

The Securities Commission will issue a comprehensive policy paper on crypto trading, and receive feedback from the industry and general public.

SCB Executive Director Christina Rolle said that in response to the intense interest in crypto related business over the last year, the government wants to ensure an appropriate regulatory framework is in place.

She added that issuance of security tokens will require direct approval by the Commission.

The proposed regulations provide a framework not only for token issuances but also for the registration and operation of crypto exchanges. It also defines certain types of “crypto” businesses such as custodians and wallet services.

The laws are applicable to fiat-to-crypto exchanges as well as crypto-to-crypto exchanges.

The Bahamas joins a growing list of nations that are trying to bring cryptocurrencies and initial coin offerings under regulatory framework and promote crypto trading, blockchain technology and fintech startups.

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